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HSBC Ponzi Scheme Class Action Lawsuit Overview:
- Who: A class action lawsuit filed by Jastram Properties Ltd. against HSBC Bank Canada was certified by a B.C. Judge.
- Why: Jastram Properties claims HSBC failed to alert the proper authorities and could have done more to warn other banks after it discovered one of its customers was running a Ponzi scheme through its bank accounts.
- Where: The class action lawsuit was certified in B.C. Supreme Court.
A class action lawsuit surrounding a $30-million Ponzi scheme has been certified against HSBC Bank Canada, the country’s seventh largest bank.
Plaintiff Jastram Properties Ltd. claims a Ponzi scheme run by Virginia Tan, a West Vancouver woman, was operated through accounts at HSBC from 2011 to the early part of 2013, reports the Vancouver Sun.
Jastram claims HSBC should have done more to investigate the fraud and warn the authorities and others about what Tan was doing, rather than simply end its relationship with her.
HSBC ended its relationship with Tan once it discovered that she was operating a Ponzi scheme, according to Jastram, however, the fraud continued for another three years after she moved to a different bank, reports the Vancouver Sun.
Jastram says it invested more than $6 million dollars into Tan’s scheme, which egged investors on to lend her money for her loan business.
HSBC, meanwhile, claims that there is no cause of action against it and that there were no common issues that would justify a certification, calling the class action lawsuit “novel” and “dangerous,” reports the Vancouver Sun.
Jastram has filed separate class action lawsuits against both Tan — which recently resulted in a $3.5 million settlement agreement — and HSBC, after claiming to have recovered only $1.8 million of its investment.
Tan previously reached a settlement agreement with the B.C. Securities Commission in 2017, at which time she reportedly admitted to parts of her role in the Ponzi scheme, reports the Vancouver Sun.
HSBC was named as a defendant in a separate class action lawsuit filed late last year against ten banks over allegations they charged customers illegal and excessive non-sufficient fund fees.
Do you believe HSBC should have done more to warn others after discovering the Ponzi scheme? Let us know in the comments!
The plaintiffs are represented by Paul Bennett and Mark Mounteer of Bennett Mounteer LLP.
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