By Josh Beckerman
HSBC Holdings PLC confirmed that it reached a settlement with
the Federal Housing Finance Agency, becoming the latest financial
firm to settle mortgage-bond lawsuits filed in 2011.
HSBC will pay $550 million. Earlier Friday, The Wall Street
Journal reported that the settlement would be between $500 million
and $600 million.
Stuart Alderoty, senior executive vice president and general
counsel for HSBC North America, said in a statement that "we are
pleased to have resolved this matter."
The FHFA alleged that HSBC's U.S. arm failed to disclose
adequately the risks on the mortgage bonds it sold to Fannie Mae
and Freddie Mac ahead of the financial crisis.
HSBC's settlement is less than the price many of its peers paid
to resolve the FHFA's claims. Last month, Goldman Sachs Group Inc.
reached a deal with the regulator valued at about $1.2 billion.
On Aug. 4, London-based HSBC said net profit for the first half
of the year declined to $9.46 billion from $10 billion in the first
half of 2013. The decline was expected by analysts after a poor
first quarter for certain businesses. Chairman Douglas Flint said
the results showed "a suitably well balanced financial performance"
at a time of low interest rates and reduced financial market
volumes.
Write to Josh Beckerman at josh.beckerman@wsj.com
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