HSBC’s Bid to Dismiss Taiwanese Bank’s Lawsuit Denied

by San Antonio Attorney

HSBC Holdings Plc (HSBA) has been rejected in its bid to dismiss a lawsuit filed by Taiwanese banks accusing HSBC Bank USA of assisting PEMGroup which defraud them of over half a billion dollars.

HSBC’s argued that the claims of the Taiwanese banks should be brought to British Virgin Islands where PEMGroup is based instead of Los Angeles. On May 9, U.S. District Judge Philip Gutierrez dismissed the argument, and also dismissed its contentions that the there were insufficient facts provided to back their claims of conspiracy and fraud.

In his order, Gutierrez said that, “These allegations, taken together, create a reasonable inference that, based on the close business relationship between HSBC and PEM Group, as well as the material incentives HSBC stood to gain by providing investors with misleading or inaccurate data regarding the investments, HSBC had sufficient knowledge of deceased PEMGroup CEO Danny Pang’s fraud. ”

The five Taiwanese banks that are making claims against HSBC Bank USA are Hua Nan Investment Trust, $48 million; Hua Nan Commercial Bank, $191 million; Cosmos Bank Taiwan, $45 million; Bank SinoPac, $122 million: EnTie Commercial Bank, $50 million; and Taichung Commercial Bank, $70 million.

The banks accused HSBC for falsely representing the former investment products of PEMGroup and lying to the investors about HSBC bank’s length of service to PEMGroup’s investments.

The negligent misrepresentation and fraud claims by EnTie and Taichung were dismissed by Gutierrez. They were given permission to restate their claims against HSBC bank in an amended complaint.

In New York, HSBC spokesperson Juanita Gutierrez said the bank would not give comment on pending litigation.

Pang, 42 years old, committed suicide in September 2009.

The case is Hua Nan Commercial Bank v. HSBC Bank USA, 10- 8773, U.S. District Court, Central District of California (Los Angeles).

More valuable news related information can be found in the San Antonio Bankruptcy section.

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