HSBC deal to settle Madoff case rejected

A US court yesterday rejected HSBC’s proposed $62.5m (£38.8m) settlement with investors in an Irish fund that lost money in Bernard Madoff’s Ponzi scheme.

District Judge Richard Berman said the accord announced on 7 June “is not fair, reasonable or adequate -- even at this preliminary stage” to investors in Thema International Fund.

HSBC said it had acted as a custodian to the fund, and provided administration and other services. It was sued in January 2009, one month after Madoff’s fraud was uncovered.

HSBC also yesterday confirmed that 3,000 jobs will be cut from its Hong Kong operations over the next three years as it targets its first wave of an aggressive cost-cutting plan in five countries.

The losses, first announced last month, are among 30,000 jobs going as chief executive Stuart Gulliver aims to cut annual costs by $3.5bn.

However, Gulliver has said that 15,000 new roles were likely to be added in Asia and other emerging markets over the long-term.

His restructuring will see HSBC exit or scale back in countries such as Poland, Russia and the United States, where it lacks scale.