EXPLAINED | US law firms launch securities probe into HDFC Bank: 7 things investors should know

Three US law firms have separately announced securities investigations involving HDFC Bank, putting the country’s largest private lender under legal scrutiny in the US.

The announcements have sparked questions about what the investigations mean. At this stage, however, there is no lawsuit against HDFC Bank. The firms are only examining whether there are sufficient grounds to pursue claims under US federal securities laws.

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Here’s what we know so far.

1. Three US law firms have launched separate investigations

The announcements came from the Law Offices of Howard G. Smith, the Law Offices of Frank R. Cruz, and Glancy Prongay Wolke & Rotter.

Each firm issued its own statement saying it is examining whether HDFC Bank may have breached US federal securities laws.

2. This is not a lawsuit

The investigations are only the first step.

For now, the law firms are simply collecting information to decide whether the matter warrants legal action. No securities class action has been filed against HDFC Bank so far.

3. The focus is on disclosures made to investors

According to the firms, they are looking into whether HDFC Bank or certain executives made materially misleading statements or failed to disclose information that investors should have known.

At this stage, these are matters being examined. The announcements do not establish any wrongdoing.

4. The trigger was a report published in May

The investigations trace back to a report published by The Indian Express on May 27.

The report alleged that HDFC Bank paid around ₹45 crore to the Maharashtra State Road Development Corporation (MSRDC) to attract large institutional deposits. It further claimed that the payments were recorded as marketing expenses and that the bank’s Chief Executive Officer was aware of them.

The bank has not publicly responded to those allegations in the context of the US law firms’ announcements.

5. The investigations relate to HDFC Bank’s US-listed ADRs

The law firms are examining the matter from the perspective of investors who own HDFC Bank’s American Depositary Receipts (ADRs), which are traded in the United States.

According to the firms, the ADR price fell after the May 27 report was published.

6. Investors are being asked to come forward

The firms have invited investors who believe they suffered losses in HDFC Bank ADRs to contact them.

The firms are trying to determine whether the available evidence justifies legal action under US securities laws.

7. What happens next?

The process is still at an early stage. The firms will decide on their next steps only after reviewing the evidence.