HSBC to set aside £825m charge after court ruling in Madoff-linked case
HSBC will set aside $1.1bn (£825m) in its third-quarter results after a Luxembourg court ruling related to the Bernard Madoff investment fraud.
The provision follows a long-running case brought by Herald Fund SPC, which in 2009 sued HSBC Securities Services Luxembourg (HSSL), claiming losses of cash and securities linked to Madoff’s Ponzi scheme, one of the largest financial scandals in history.
This month, the Luxembourg Court of Cassation rejected HSSL’s appeal on Herald’s securities restitution claim but upheld its appeal concerning the cash restitution claim.
HSSL now plans to pursue a second appeal before the Luxembourg Court of Appeal to contest the amount it may be required to pay.
Madoff, who died in prison in 2021, admitted to defrauding thousands of investors of around $65bn (£48.7bn).
HSBC said the final financial impact remains uncertain due to the complexity of the case and the ongoing appeals process.