Household HSBC Watch

Is this legal precedent that HSBC Finance should worry about? Rejecting the arguments of Countrywide executives and directors that they were unaware of lax loan operations that led to ballooning defaults, Judge Mariana R. Pfaelzer of Federal District Court in Los Angeles ruled Tuesday that she found confidential witness accounts in the shareholder complaint to be credible and that they suggested “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.”

HSBC Finance is a “pay for performance’ company. Former employees have sent emails suggesting “a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards.” Another round of layoffs is predicted for California, while more employees may then come forth. Is the Countrywide case something HSBC should worry about? We shall soon see.