HSBC Reaches Definitive Agreement with US Department of Justice to Resolve Legacy RMBS Claims
10 October 2018 - 3:01AM
Business Wire
HSBC today announced a definitive agreement with the US
Department of Justice (DOJ) to resolve its multi-year investigation
of its legacy securitization, issuance and underwriting of
residential mortgage-backed securities (RMBS) issued between 2005
and 2007.
“We are pleased to put this investigation related to activity
that occurred more than a decade ago behind us,” said Patrick J.
Burke, President and Chief Executive Officer, HSBC USA. “Since the
financial crisis, HSBC has been strengthening our culture,
processes and internal controls to ensure fair outcomes for our
clients. The US management team is focused on putting historical
matters into the rear view mirror and completing the turn-around of
HSBC’s US operations.”
Under the terms of the agreement, HSBC North America Holdings
Inc. (HSBC North America), without admitting liability or
wrongdoing, will pay to the DOJ a $765 million civil monetary
penalty, of which $492 million will be paid by HSBC USA Inc., HSBC
North America’s US-based public company. As previously disclosed,
HSBC North America and HSBC USA Inc. were fully reserved for these
amounts as of June 30, 2018.
The settlement releases HSBC from potential civil claims by the
DOJ related to its securitization, issuance and underwriting of
RMBS during the period from 2005 through 2007, and requires no
additional remedial action.
Forward-looking statements:
Certain statements in this press release are “forward-looking
statements” within the meaning of the rules and regulations of the
U.S. Securities and Exchange Commission. These statements are based
on management’s current expectations and are subject to uncertainty
and changes in circumstances. Actual results and other financial
conditions may differ materially from those included in these
statements due to a variety of factors including those contained in
HSBC USA Inc.’s filings with the U.S. Securities and Exchange
Commission, including without limitation the “Risk Factors” section
of HSBC USA Inc.’s 2017 Annual Report on Form 10-K. Precautionary
statements included in such filings should be read in conjunction
with this release.
Note to editors:
HSBC USA Inc. is a Maryland corporation and its principal
business is to act as a holding company for its subsidiaries
including HSBC Bank USA, N.A. Through HSBC Bank USA, N.A. and its
subsidiaries, HUSI offers a full range of traditional banking
products and services to individuals, including high net worth
individuals, small businesses, corporations, institutions and
governments. HSBC USA Inc. is a wholly-owned subsidiary of HSBC
North America Holdings Inc.
HSBC North America Holdings Inc. is the holding company
for HSBC Holdings plc's operations in the United States. The
company’s businesses serve customers in the following key areas:
retail banking and wealth management, commercial banking, private
banking, and global banking and markets.
HSBC Holdings plc, the parent company of the HSBC Group,
is headquartered in London. The Group serves customers worldwide
from around 3,900 offices in 67 countries and territories in
Europe, Asia, North and Latin America, and the Middle East and
North Africa. With assets of US$2,652bn at 31 March 2018, HSBC is
one of the world’s largest banking and financial services
organisations.
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version on businesswire.com: https://www.businesswire.com/news/home/20181009005891/en/
HSBCMedia enquiries to:Rob Sherman, +1
212-525-6901robert.a.sherman@us.hsbc.comorHeidi Ashley, +44 (0)207
992 2045heidi.ashley@hsbc.comorInvestor enquiries to:Richard
O’Connor, +44 (0)207 991 6590richard.j.oconnor@hsbc.com
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