Siegel v. HSBC Holdings, PLC

283 F. Supp. 3d 722
CourtDistrict Court, E.D. Illinois
DecidedAugust 14, 2017
DocketCase No. 15–cv–10139
StatusPublished
Cited by10 cases

This text of 283 F. Supp. 3d 722 (Siegel v. HSBC Holdings, PLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Siegel v. HSBC Holdings, PLC, 283 F. Supp. 3d 722 (illinoised 2017).

Opinion

John Robert Blakey, United States District Judge

On November 9, 2005, terrorists affiliated with al-Qaeda in Iraq ("AQI")1 perpetuated coordinated bombings of three hotels in Amman, Jordan. Certain victims of that cowardly attack and their representatives2 now allege that Defendants HSBC Holdings, plc ("HSBC-Holdings"), HSBC Bank USA, N.A. ("HSBC-U.S."), HSBC Bank Middle East Limited ("HSBC-Middle East"), HSBC North America Holdings, Inc. ("HSBC-North America"), and Al Rajhi Bank facilitated AQI's access to *726American financial markets, thereby aiding and abetting AQI's terrorist activity in violation of the Anti-Terrorism Act ("ATA"), 18 U.S.C. § 2333(d).

Currently pending before the Court are a Motion to Dismiss or To Transfer filed by Al Rajhi Bank [64] and a Motion to Strike, Dismiss and Transfer filed by the HSBC entities [67]. Both motions are fully briefed, and the Court heard oral argument on July 26, 2017.

For the reasons explained below, Al Rajhi Bank's motion is granted, and the collective HSBC motion is granted in part and denied in part, all without prejudice.

I. Background

A. Al Rajhi Bank

Al Rajhi Bank is incorporated under the laws of the Kingdom of Saudi Arabia and maintains its principal place of business there. [59] at 9. It functionally has no presence in the United States, according to the unrebutted affidavit submitted by its Chief Operations Officer. [52-1] at 1-3. It is not registered or licensed to do business here, and it does not have any employees, branch offices, subsidiaries or agencies here. Id.

Plaintiffs claim that Al Rajhi Bank entered into a "scheme" whereby it "established, maintained and administered a highly organized program to make financial payments to terrorist groups al-Qaeda and AQI possible." [59] at 27. Plaintiffs also generally allege the each Defendant, including Al Rajhi Bank, "committed numerous acts in furtherance of this scheme," and took "affirmative steps to conceal" these transactions from American regulators. Id. at 19-20.

Plaintiff's Amended Complaint also incorporates a report from 2010 entitled "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing," authored by the United States Senate Permanent Subcommittee on Investigations ("the Report"). Id. at 17. The Report reflects, inter alia , that while banks "rarely carry explicit links to terrorist financing," Al Rajhi Bank exhibits a number of troubling "factors," including "the naming of a key bank official in a list of al Qaeda financial benefactors, a U.S. law enforcement search of Al Rajhi nonprofit and business ventures in the United States to disrupt terrorist financing, a CIA report targeting the bank for being a 'conduit' for extremist finance, the bank's refusal to produce authenticating bank documents for use in the criminal trial of a client who cashed travelers cheques at the bank for use by terrorists, and multiple accounts held by suspect clients."Id. at 18-19.

Al Rajhi Bank is seeking to dismiss the claims against it for want of personal jurisdiction, or, in the alternative, to transfer this action to the Southern District of New York. See generally [64].

B. The HSBC Defendants

The Amended Complaint frequently makes wholesale reference to the "HSBC Defendants." These collective allegations purport that, inter alia , the HSBC Defendants were "offering a gateway for terrorists to gain access to U.S. dollars and the U.S. financial system," "opening U.S. correspondent accounts for high risk affiliates without conducting due diligence," and "providing U.S. correspondent services to banks with links to terrorism," including Al Rajhi Bank. [59] at 7-8.

1. HSBC-North America

Defendant HSBC-North America is a Delaware corporation with its principal place of business in New York City. [68-4] at 2. It principally serves as a holding company for its subsidiaries. Id.

The only allegation in the Amended Complaint specific to HSBC-North America states that its "officials, committee *727members, compliance officers, and Anti-Money Laundering ('AML') directors are involved with, and oversee, the compliance and AML operations at [HSBC-U.S.]." [59] at 7.

HSBC-North America is seeking to strike the claims against it pursuant to Federal Rule of Civil Procedure 12(f) or, in the alternative, to transfer this action to the Southern District of New York. See generally [67].

2. HSBC-Holdings

Defendant HSBC-Holdings is a holding company organized under the laws of the United Kingdom, with its principal place of business in London. [68-1] at 2. It is, by its own admission, the "ultimate parent company of the other HSBC Defendants," [68] at 4, and it has no operations or employees in the United States. [68-1] at 2.

The Amended Complaint contends that HSBC-Holdings "used tactics to circumvent" regulatory procedures that identify and halt transactions involving prohibited persons and countries. [59] at 22. These "tactics" include "stripping information from wire transfer documentation to conceal the participation of a prohibited country or person, or characterizing a transaction as a transfer between banks in an approved jurisdiction, while omitting payment details that would disclose participation of a prohibited originator or beneficiary." Id.

HSBC-Holdings is seeking to have the claims against it dismissed for lack of personal jurisdiction. See generally [67].

3. HSBC-Middle East

Defendant HSBC-Middle East is a bank incorporated and headquartered in Dubai, with no U.S. operations or employees. [68-2] at 2. It does not offer the "correspondent" banking services that are central to Plaintiffs' allegations.3 [68-3] at 2.

HSBC-Middle East is also seeking to have the claims against it dismissed for want of personal jurisdiction. See generally [67].

4. HSBC-U.S.

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Bluebook (online)
283 F. Supp. 3d 722, Counsel Stack Legal Research, https://law.counselstack.com/opinion/siegel-v-hsbc-holdings-plc-illinoised-2017.