By Tom Hals
Oct 17 (Reuters) - A unit of British bank HSBC Holdings Plc was hit on Thursday with a record $2.46 billion finaljudgment in a U.S. securities class action lawsuit against abusiness formerly known as Household International Inc.
The judgment by U.S. Judge Ronald Guzman in Chicago was thelargest in a securities fraud class action that went to a trial,according to a statement from the Robbins Geller Rudman & Dowdlaw firm that represented investors.
Almost all securities fraud class action cases settle beforegoing to a jury.
The suit was filed in 2002 and alleged HouseholdInternational, its chief executive, chief financial officer andhead of consumer lending made false and misleading statementsthat inflated the company's share price.
The plaintiffs also claimed that Household artificiallyboosted its share price by engaging in predatory lending and hidthe quality of its loan portfolio.
When reports about Household's lending practices began toemerge in 2001, the share price sank to a seven-year low.
HSBC bought the U.S. lender in November 2002.
HSBC believes it has a strong case and plans to appeal,according to an HSBC spokesman. He added that the matter hasbeen noted in HSBC regulatory filings.
In 2010 a Manhattan federal jury found Vivendi SA liable formisleading statements to investors and damages were estimated at$9.3 billion. However, after various challenges and appeals, thevast majority of that case was dismissed.
The case is Lawrence E. Jaffe Pension Plan v HouseholdInternational Inc, U.S. District Court, Northern District ofIllinois, No. 02-C-5893.