James Connolly exposed HSBC for defrauding CalPERS involving over $7 million being overcharged.

Exposing Financial Fraud Against California Public Pension Funds

Connolly, acting as a whistleblower under the qui tam provisions of the California False Claims Act, brought the case against HSBC. Details about his specific role within HSBC are not available.

Connolly exposed a complex scheme employed by HSBC to overcharge CalPERS for foreign currency transactions involving Euros and British Pounds. This resulted in millions of dollars being lost from the pension fund, directly impacting California’s retired firefighters, police officers, and other public employees.

A California Department of Justice (DOJ) investigation indeed revealed a pattern of inflated charges by HSBC on CalPERS’ foreign currency transactions during 2008 and 2009. The DOJ concluded that these markups caused millions in losses to the pension fund.

On September 24, 2020, California Attorney General Xavier Becerra announced a $7 million settlement with HSBC to resolve allegations of violating the California False Claims Act. Becerra explained the significance of the qui tam whistleblower law, “When you retire from public service, every dollar of your pension counts…we’re holding HSBC accountable for cheating California state pensioners out of their money…no doubt $7 million counts a lot.”

California’s False Claims Act, mirroring the federal version, empowers whistleblowers with firsthand knowledge of fraud to file lawsuits and receive awards based on the recovered funds. This case demonstrates the Act’s effectiveness in deterring fraud and protecting public resources.