Aldinger Era Execs Fired As Problems Mount

See the latest about Bobby and TransUnion

When William F. Aldinger sold his scandal plagued predatory lending company, then called Household International, to HSBC Bank plc he knew he had to profit personally before the sham fell apart. An opportunist who profitted from running scams on borrowers, Aldinger’s departure left room for promotions in the executive ranks of the old Household International. Bobby Mehta and Sandra (Sandy) Derickson became HSBC executives. Derickson, who once left GE under questionable circumstances, and Mehta were later integrated into HSBC USA. At the time we wrote that reputable bankers at HSBC might perceive of these two slick finance company employees as outsiders and non-bankers. That was 2003.

Fast forward to February 2007. These opportunists, as it turned out, were running a scam on HSBC as well as borrowers, and were removed (read as fired) as the house of cards, smoke, mirrors, and bad loans started to crumble. It is the second time for Derickson, amid rumors she ran one of GE’s lending divisions almost into the ground before her departure form GE. Bobby Mehta, on the other hand, was always in over his head, relying on strong arm tactics and oppressive legal contracts to keep borrowers in line.

Enter HSBC’s Chief Executive Michael Geoghegan. A real banker, not a finance company clown with a college degree and a polyester leisure suit, Geoghegan fired Bobby Mehta and Sandra Derickson. HSBC has ousted the head of its North American operations, Bobby Mehta, in the wake of this month’s (January 2007) shock profit warning from its troubled U.S. mortgage business. HSBC said Mehta stepped down as chief executive of HSBC Finance Corp. and as head of HSBC North America with effect from February 15.

Now for Sandy Derickson’s version of “I’ve been here before”. The bank also replaced the head of its New York-based retail banking operation, HSBC Bank USA. HSBC appointed Paul Lawrence as president and CEO of HSBC Bank USA and HSBC USA Inc. with immediate effect, replacing Sandy Derickson, who is leaving the bank. HSBC should take a very hard look at what William F. Aldinger sold to them, disguised as Household International. Here at Household – HSBC Watch we predicted this problem for HSBC way back in 2002. In fact the ‘New Cingular AT&T’ should look at Aldinger – now on their board of directors – to see what value he might bring to their company, looking closely at whether he is a liability or an asset. It turned out he, his company, and his executives were a liability for HSBC. Then again a predatory lender, or predatory executive for that matter, usually is a wolf disguised in sheeps clothing.