Britain's biggest bank, HSBC, has been ordered to pay $2.5bn (£1.5bn) by a court in Chicago in the largest class action judgment in legal history.
HSBC intends to appeal against the decision in what it sees as the latest stage in an 11-year legal battle sparked by shareholders in Household International, the consumer lending business it bought in 2002.
The complaints by the shareholders relate to the period before HSBC bought the business, when the shareholders claimed they had been misled about accounting and lending practices by the previous management team of Household.
James Glickenhaus of Glickenhaus & Co, one of the three lead lawyers representing the shareholders, said the judgment "shows that the fraud committed by Household International and the individual defendant officers will not go unpunished, and we look forward to having the judgment affirmed on appeal".
HSBC has been warning its shareholders in its annual report about the potential cost of the legal action for a number of years and its most recent update on the situation – which takes up an entire A4 page in its interim results – had revealed the bill could amount to $3.5bn. It has taken a provision of an unspecified size as a precaution against the judgment but said it has a strong argument against the ruling, first made in April 2009 after a jury trial.
Legal proceedings since 2009 mean that the final judgment was only handed down in the Chicago court on Thursday and the cost of the acquisition has been written off. Green, who was not running HSBC at the time of the deal, was enobled and joined the coalition government as a trade minister but is now stepping down.
HSBC was hit a record $1.9bn fine in December 2012 after the US authorities accused the bank of a "blatant failure" to implement money laundering controls which allowed it to move money around the financial system for drug barons and terrorists.
guardian.co.uk © Guardian News and Media Limited 2010
image: © Barry Caruth