HSBC target in Lehman Brothers lawsuit
An HSBC branch in Hong Kong
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Steve Chiotakis: Investors are planning a multimillion-dollar lawsuit over the collapse of Lehman Brothers. The target: the London-based bank HSBC. The complaint: distributing Lehman-backed bonds.
From the British capitol, here's our European Correspondent, Stephen Beard.
Stephen Beard: The lawsuit will straddle the globe. The plaintiffs are in Hong Kong, the defendants are in London, and the action is over the defunct American bank Lehman Brothers.
Hundreds of millions of dollars are at stake. More than 40,000 people in Hong Kong bought Lehman-backed bonds -- many of them from HSBC. The bonds are now worthless, and the investors hold HSBC responsible.
Peter Hahn is with the Cass Business School. He says HSBC is a good target. It's been largely unscathed by the financial crisis and has deep pockets. Hahn says regardless of the merits of this case, there's likely to be a wave of similar lawsuits:
Peter Hahn: What we've seen throughout the financial services industry of late is poorly researched acquisitions by banks, poorly researched investments made on behalf of clients by banks. And it's really open ground for lawsuits.
HSBC says it will vigorously contest the case.
In London, this is Stephen Beard for Marketplace.