HSBC must defend in fraud lawsuit
NEW YORK, Aug 9 (Reuters) - A federal appeals court ruled that Bank of America Corp., HSBC Holdings Plc and Sterling Bancorp must defend against a lawsuit related to a lawyer’s Ponzi scheme that defrauded Orthodox Jews and others out of millions of dollars. A three-judge panel of the U.S. Second Circuit Court of Appeals on Tuesday reinstated state law claims brought by dozens of investors alleging that the banks were negligent, and aided and abetted a breach of fiduciary duty.
The case involved David Schick, a Brooklyn, New York, real estate lawyer who in the early 1990s convinced investors that he had devised a “no-risk” scheme to generate high returns by bidding on and subsequently selling pools of mortgages.
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