A view of the HSBC bank logo on a wall outside a branch in Mexico City, Mexico on June 14, 2024.
Henry Romero | Reuters
HSBC said on Monday it would recognize a $1.1 billion provision in its third-quarter results After the court decision In connection with the Bernard Madoff investment fraud case in Luxembourg.
Herald Fund SPC sued HSBC’s Luxembourg unit in 2009, claiming the return of securities and cash lost in the fraud.
The court dismissed the HSBC unit’s appeal in respect of Herald’s securities restitution claim, but allowed the unit’s appeal in respect of the cash restitution claim.
The bank will now pursue a second appeal before the Luxembourg Court of Appeal and, if unsuccessful, will contest the amount to be paid in subsequent proceedings.
Madoff described THe is the mastermind behind the biggest investment scam In the US, as much as $65 billion in consumer fraud. He pleaded guilty in 2009 to a scheme that began in the early 1970s, robbing more than 40,000 people in 125 countries over four decades, before being caught on December 11, 2008.
In his interim report HSBC said in a July 2025 release that Herald is seeking $2.5 billion plus interest from HSBC, or $5.6 billion plus interest in bond losses and cash repayments.
HSBC said non-US HSBC companies provided custodial, administration and similar services to a number of funds invested in Bernard Madoff investment securities.
The news comes a day before HSBC announces its results, with the bank saying the $1.1 billion provision will affect its common equity tier 1, or CET1, ratio by about 15 basis points. The CET1 ratio is a measure of a bank’s financial strength, and is used to determine its ability to withstand distress.
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