HSBC Holdings Plc will pay $765 million to settle allegations that it sold defective residential mortgage-backed securities, resolving one of the last remaining U.S. investigations stemming from the mortgage meltdown a decade ago, Bloomberg reported. The sum, announced yesterday by U.S. Attorney Bob Troyer in Colorado, is substantially lower than the billions paid by other banks to resolve misconduct linked to these toxic securities. London-based HSBC wasn’t a major player in the market. With Wells Fargo & Co.’s agreement in August to pay $2 billion and Royal Bank of Scotland Plc’s deal to pay $4.9 billion that same month, the U.S. Department of Justice is now near the end of its decade-long effort to extract penalties for the conduct that led to the financial crisis of 2008. The biggest settlements, struck in 2013 and 2014, called for JPMorgan Chase & Co. and Bank of America Corp. to pay $13 billion and $17 billion, respectively, to resolve their cases. Unlike prior mortgage-related settlements with the Obama administration, this one doesn’t impose consumer relief or payments to state or federal agencies. For example, Citigroup Inc.’s $7 billion settlement included payments of $2.5 billion to help consumers and $500 million to federal agencies and state governments.
