As HSBC Holdings Plc (HSBA), the biggest European bank by market value, appeals the U.S. jury verdict that produced a $2.46 billion judgment, additional liabilities from the securities fraud case remain unresolved.
The money judgment, rendered Oct. 17 by U.S. District Judge Ronald A. Guzman in Chicago, doesn’t account for more than 25,000 still-pending claims exceeding $650 million, according to a statement issued by trial-winning lawyers Michael Dowd and Spencer Burkholz at San Diego-based Robbins Geller Rudman & Dowd LLP.
“Judge Guzman also ordered the defendants to pay post-judgment interest which will accrue during the defendant’s appeal,” the lawyers said.
A Chicago federal jury in 2009 found executives at Household International, now part of HSBC Finance Corp., misled investors about its business practices.
The case was filed in 2002. That year the lender agreed to pay $484 million in fines to settle claims lodged by more than a dozen states that it deceived borrowers about their mortgages.
“We plan to appeal, and we believe we have a strong argument,” HSBC spokesman Patrick Humphris said in an e-mailed statement.
While the trial court jury had determined stockholder losses from March 23, 2001, to Oct. 11, 2002, could be as much as $23.94 a share, it made no lump-sum award, and the lender’s liability remained open pending review of loss claims.
Dowd reported to Guzman in June that a claims examiner had reviewed and approved claims worth almost $1.5 billion.
The judge issued an order this month denying defense requests to overturn the verdict or order a new trial and directed entry of a judgment for more than $1.48 billion in liability and $968 million in accrued pre-judgment interest.
Lawyers for both sides are due back before Guzman for a status conference on Oct. 23.
Plaintiffs’ lawyers said Oct. 17 the judgment is the biggest ever following a trial of securities fraud class-action claims.
Household was acquired by London-based HSBC in March 2003 for $15.5 billion.
The case is Lawrence E. Jaffe Pension Plan v. Household International Inc., 1:02-cv-05893, U.S. District Court, Northern District of Illinois (Chicago).
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