HSBC will pay $550m (£338m) to US regulators to settle claims it missold mortgage-backed securities to US mortgage giants Fannie Mae and Freddie Mac.
The BBC reports the lawsuit had accused HSBC of making $6.2bn (£3.8bn) of mortgage-backed securities look like they met regulatory guidelines, when they did not. HSBC has previously denied the allegations.
It is the 16th bank to reach an agreement with the Federal Housing Finance Agency over the issue. Royal Bank of Scotland has yet to settle its case.
The FHFA, which oversees Fannie Mae and Freddie Mac, has now recouped $17.9bn (£11bn) from settlements with banks.
HSBC says it is “pleased to resolve the matter”.
Fannie Mae and Freddie Mac lost more than $30bn (£18.5bn) in the financial crisis, and were bailed out by the US government.