HSBC was on Monday ordered to face three U.S. lawsuits accusing it of breaching its duties as a trustee overseeing residential mortgage-backed securities that suffered more than $34bn of losses in the global financial crisis.
Reuters reports that U.S. District Judge Shira Scheindlin in Manhattan said the plaintiff investors, including funds from BlackRock, Allianz's Pacific Investment Management Co and TIAA-CREF, could pursue claims accusing HSBC of breach of contract, and concealing known defects in mortgage loans backing 283 trusts.
'Based on plaintiffs' detailed allegations, it is indeed plausible to infer that HSBC had actual knowledge of breaches in representations and warranties in the specific loans at issue', Scheindlin wrote in a 53-page decision. 'How HSBC gained this actual knowledge, or whether in fact it had actual knowledge, may be determined through discovery'.
In the meantime, Bloomberg reports that the head of the South African authority investigating banks for allegedly fixing the price of the rand said it will seek to prove 'widespread' collusion and may probe more financial services companies with 'stiff' fines expected.
Competition Commissioner Tembinkosi Bonakele, 39, said in a May 29 interview he was 'fascinated' by the 'very casual way' in which the alleged collusion between traders took place, mostly through electronic platforms.