A record $2.46 billion judgment has been awarded in a class action lawsuit against a unit of HSBC Holdings Plc, after it was found guilty of making false and misleading statements that inflated the company’s share price.
According to Reuters, the lawsuit alleged that Household International, its chief executive, chief financial officer and head of consumer lending duped investors. The judgment by U.S. Judge Ronald Guzman in Chicago was the largest in a securities fraud class action that went to a trial, according to Reuters. Plaintiffs also alleged Household International artificially boosted its share price by engaging in predatory lending and hid the quality of its loan portfolio.
HSBC bought the lender in November 2002. A representative said that the company plans on appealing the judgment, and that the matter has been noted in regulatory filings.
Prior to this judgment, Reuters reported that in 2010, a Manhattan federal jury found Vivendi SA liable for misleading statements to investors and a $9.3 billion judgment was awarded. However, through appeals, most of the case has been dismissed.
Securities class action lawsuits like this typically involve a stock or security value going down because of company mismanagement and/or improper disclosure of its financial prospects. Obviously, when a company allegedly commits fraud by inflating values and hiding the quality of its portfolio, it can have an impact on share prices.
In these cases, because a single investor may not be able to sue the company individually, multiple investors may be able to bring a case representing the interest of all investors.
If you are an investor and you have questions concerning your legal interests when it comes to securities litigation, please contact Gary S. Graifman, Esq., of Kantrowitz, Goldhamer & Graifman, P.C., at 1-(800) 711-5258. You can also send us an email or fill out the contact form on our website.
Kantrowitz, Goldhamer & Graifman, P.C. – Class Action Lawyers