A £1.3bn fraud claim has been filed by 371 investors against HSBC UK for losses caused as a result of their Eclipse Partnerships film investment scheme, which they said they were induced to invest in on "false promises."
The Eclipse scheme was created, developed and marketed by HSBC to finance a series of blockbuster Disney films including Pirates of the Caribbean 2 and 3, National Treasure 2, Enchanted, Underdogs and Confessions of a Shopaholic.
However, the claimants - who have filed their complaint with law firm Edwin Coe LLP - say none of these film rights were ever actively traded, leading to significant losses and potential liabilities.
It was a risk-free income stream for Disney, HSBC and the lending banks - but financially catastrophic for its unwitting investors."
HSBC allegedly received more than £25m in fees for its role in Eclipse, which was open to investors between 2006 and 2008. 750 individuals invested a combined £2.3bn of capital in Eclipse - all of whom obtained loans to fund the investment which they believed they would be able to pay off with the return they made.
According to Edwin Coe, many investors in the scheme - which was marketed as "a legitimate tax-efficient investment" - have entered bankruptcy or are facing demands from HMRC that are as much as ten times more than their original investments, as no trade in film rights was ever made by Eclipse with Disney.
David Greene, senior partner at Edwin Coe, said, "It is now clear Eclipse was a passive pass-through model via which the rights to Disney's films circled back to the studio".
"Eclipse was a sham investment opportunity," he said. "It appears the investments made by our clients were simply transferred between funder and Disney entities in a circular, self-cancelling fashion.
"It was a risk-free income stream for Disney, HSBC and the lending banks - but financially catastrophic for its unwitting investors. At no point did Eclipse actually exploit, or otherwise trade in, any meaningful film rights of any value from Disney."
HSBC has been approached for comment.