HSBC Holdings Plc is discussing the resolution of a US investigation into the sale of toxic mortgage bonds a decade ago, according to people familiar with the matter, a deal that could help quickly see Trump’s Justice Department facing global banks.
The London-based bank had at least one meeting with the Justice Ministry and is expected to meet again, said three people who asked not to be named because the talks are confidential.
The two sides are kept away in discussions with lawyers at the Department of Justice, while the people appointed by the administration should still weigh Trump said one of the people. A resolution, if one can be reached, still takes weeks or even months, people said.
If HSBC reached an agreement with the government, it could give an early indication of how the new administration will charge financial sanctions. Attorney General Jeff Sessions last month issued a memo to the entire department’s requirement that settlement funds be delivered to the United States.
Treasure or victims. Earlier cases helped pay billions of dollars in penalties through emergency consumer measures – modifications of mortgages, payment plans and short sales, among other remedies.
The Justice Department has not said whether the so-called soft dollar costs penalties would be allowed under the new policy.
“The rescue of consumers is a way for companies engaged in harmful behavior to recognize their role in creating the problem and be part of the solution,” said Christopher Casey, a former Justice Ministry official who worked in Mortgage bonds during the Obama administration.
“That is why these provisions in the regulations that were previously achieved in my opinion were a positive part of the regulations and were effective.”
HSBC said government lawyers said the bank at the end of last year that its preliminary view was that the bank was responsible for questionable securities sold between 2005 and 2007, according to the company’s annual report filed in March.
HSBC said in the report that it did not agree with the Ministry of Justice and that it would govern later. The bank’s position has not changed, said one of the people.
The talks show that Justice Department lawyers – who mainly operate law firms in the United States – continue to advance the case of the Obama administration’s pending mortgage bonds.
However, it is unclear how the direction of the Justice Department is involved in these efforts. Under Obama, mortgage applications were overseen by the head of Department of Justice 3, who has been active in negotiating multi-million dollar deals with global banks.
Rachel Brand, the Trump-appointed official on this post worked for just over a month, while the Justice Department’s Civil Division – another key player in previous settlements – operates under temporary leadership.
There is no guarantee that the two parties will reach an agreement. The Justice Department sued Barclays Plc in December, following the breakdown of settlement negotiations in this case.
The Justice Department declined to comment. A spokesman for HSBC said the bank’s comments on the matter in its annual report and declined to comment further.