LONDON— HSBC says it may take years to resolve litigation linked to the Bernard Madoff Ponzi scheme, as the bank reported a 14% drop in quarterly profit after booking a $1.1-billion charge related to the case, The Guardian reported.
The provision, tied to long-running claims from investors who suffered losses in the 2009 fraud scandal, weighed on earnings despite stronger revenue in the three months ending in September. Executives cautioned that the ultimate financial impact remains uncertain and that the legal process could stretch on well into the future, The Guardian noted.
So far, HSBC has set aside roughly $1.1 billion to cover potential liabilities stemming from the largest Ponzi scheme in history.
Madoff admitted in 2009 to orchestrating a scheme that defrauded thousands of investors out of roughly $65 billion, ultimately receiving a 150-year prison sentence. He died in custody in 2021. HSBC had served as administrator for several funds with exposure to Madoff Securities.
The latest blow to the bank follows a Luxembourg court’s decision to reject its appeal in the long-running case involving its local unit, clearing the way for continued litigation and potential further payouts.