HSBC Bank and Other Banks Face Class Action Lawsuits in the US
HSBC Bank and Standard Chartered have been facing class action suits over money laundering charges. Two American law firms have so far developed class action suits against HSBC and Standard Chartered, following allegations that the banking giants had failed to curb money laundering at their facilities. Both banks are in the process of fighting back against the legal challenge, seeking protection under various grounds, but the question remains, whether they can successfully fight this case?
In March 2020, an investigation by the BBC’s Panorama revealed HSBC had allowed some employees to operate a secret Swiss bank account. The report stated, “HSBC in Britain has helped hundreds of its customers open a secret offshore banking account”. According to the report, the account had been kept hidden by bank management and accounts were only opened using a code. HSBC officials were caught on tape discussing how the secret accounts were set up, according to the BBC, and HSBC’s former CEO was caught on tape saying that no such account existed.
The BBC also noted that many of the lawsuits against the banks were brought by middle-class citizens who had found themselves the victims of these accounts. The bank was not directly named, but the BBC claimed that a number of the bank executives could be implicated. HSBC denied any wrongdoing and has filed a legal complaint in the United States District Court for the Eastern District of Texas against the BBC, stating that it had “mischaracterized” its practices.
HSBC Bank and Standard Chartered Bank are not the only banking corporations to get into hot water with class actions in recent times. Many other corporate entities have faced legal claims in recent years, including Credit Suisse Group AG, HSBC Bank and Citigroup, to name a few.
The BBC report mentioned the case of HSBC Bank, which is the fourth largest bank in the world, according to Forbes. The bank has already faced a number of lawsuits over its activities. In the UK alone, there are over 300 cases against the bank, although the bank faces several more in the US.
HSBC Bank and other big banks are well protected under international banking laws, which state that banks cannot be forced to settle a class-action lawsuit against them in the court of law. This means that the bank cannot be compelled to pay out large amounts of money if a claim is successfully won. For the plaintiff, this means that they are free to pursue their claim, without having to take any money from the bank, but the bank cannot be forced to pay out anything if they lose the case.
If the plaintiff does receive a settlement, however, there will almost certainly be a huge amount of it. The plaintiff could receive up to 10% of the proceeds of the alleged bank’s profits from the alleged transactions, depending on the gravity of the accusations. There are some exceptions, however. These include fraud, which can be brought in civil court against a company or individual if the charges made are proven.
It is important to note that some class-action lawsuits are unsuccessful and that this can have a negative impact on the success rate of those who are attempting to bring legal issues against companies. If a company is involved in such lawsuits, they are often entitled to have all claims that were brought against them in court put on hold during the course of the litigation. This means that the case will be suspended for some time while the company and its attorneys prepare for a trial.
