Justice Arthur M. Schack sanctioned the U. S. subsidiary of London-based HSBC Holdings Plc last week, citing the bank’s “waste of judicial resources” in continuing a foreclosure action “with all of its defects.”
In his ruling, he said the bank’s “use of robosigners” is “completely without merit in law,” and he accused the bank of asserting “material factual statements that are false.”
He also sanctioned HSBC’s legal counsel, the law firm of Shapiro DiCaro & Barak LLC, for the same reasons, putting blame specifically on attorney Frank M. Cassara but imposing a $5,000 fine on the firm instead of the attorney.
The judge did not fine HSBC USA CEO Irene M. Dorner, whom he had ordered to appear in a hearing July 15 to justify why he should not sanction her or the bank. Dorner was out of the country and did not appear at that hearing, but rather sent an attorney as her representative.
That had triggered indignant outrage among a few online pundits and foreclosure victims, but Schack acknowledged in his ruling that, because she had the attorney present, “It’s HSBC that I might be able to sanction, not Ms. Dorner as an individual.”
An HSBC spokesman said the bank should not be blamed because it didn’t handle the loan but was only responsible for administering the mortgage investment trust that included the loan.
“HSBC did not service this loan and neither prepared nor filed any of the underlying legal documents presented to the court,” said spokesman Neil Brazil. “HSBC’s role in this case is limited to that of trustee . . ..We are evaluating the ruling.”
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