HSBC Fined For Glossing Over CMO Risks

Law360, New York (August 19, 2010, 5:02 PM EDT) -- The Financial Industry Regulatory Authority has fined HSBC’s U.S. brokerage unit $375,000 for recommending complex mortgage securities to small investors without properly warning them about the risks.

The independent regulator for securities firms said Thursday that HSBC Securities USA Inc. drew the fine in connection with suggesting collateralized mortgage obligations to retail customers and failing to adequately supervise the suitability of the sales of the securities or fully explain the risks involved with an inverse floating rate.

The British banking firm, which did not admit or...
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