Household HSBC Watch

On the legal front it appears as though HSBC USA and HSBC North America Holdings have some explaining to do. In a recent court document it was discovered that the are actual two additional holding companies as part of HSBC in the United States. Why is that?

There are actually two additional US holding companies between HNAH (HSBC North America Holdings) and HUSI (HSBC USA Incorporated). The two others are HINO and HNAI. This disclosure raises questions about which holding companies there may be between HNAH and HSBC Finance, not to mention questions about why all these US holding companies are needed. This information obviously conflicts with the other SEC filings or public documents that HSBC published. Yet HSBC had the nerve to use the plaintiffs supposed “misunderstanding” of HUSI’s holding company structure (a misunderstanding that HSBC may have created) as a defense for dismissal. Whether or not the Plaintiff knew of the existence of these two other holding companies (which HUSI claims it did), and when they became aware, may be an interesting technical issue in this particular case but it doesn’t resolve the fact that HUSI and HNAH don’t appear to disclose this freely to most investors and actually misrepresent it in numerous documents.

The reason for this disinformation is simple. When anyone complains about HSBC the chain of misinformation begins at the highest level and continues on down to the “state regulated” office. In my conversations with the OCC the stumbling blocks put in place by HSBC obviously frustrate the efforts of regulators. The court document to which I refer above is another of HSBC’s request for dismissal due to lack of jurisdiction. It is the belief of our watchdog organization and others that HSBC distributes misleading info (that others would believe they can depend upon) and then uses the info against those who depend on it.

Those who monitor Household International, and now HSBC, on a daily basis believe HSBC has insulated HSBC USA and HSBC plc in London in the event that HSBC Finance gets them sued. If you recall the open comment period of 2002 when HSBC first applied to purchase Household International, many lawyers, class action specialists, and state-level groups knew there was no money at Household, and talked of later suing HSBC. Granted, some pending cases such as Shea vs. Household was settled after HSBC owned the company. That case actually combined four cases prior to settlement.

Something is wrong at HSBC Finance. Something is also wrong with the holding company structure at HSBC. It obviously conflicts with the other SEC filings or public documents that HSBC published. In light of problems in the mortgage industry will the SEC and others make HSBC explain the srtucture and the intent of said structure? Will the actual legal chain be published and used by the National Association of Attorney’s General? Time will tell.