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Inverse Floaters and FINRA Fine Leave HSBC with a Sinking Feeling
Posted by: Robert Rex
September 27, 2010

Great post today on the NY Bar Association's blog about recent FINRA action against HSBC:

"...FINRA issued a $375,000 fine to HSBC Securities (USA) Inc. (?HSI?) for violations of self-regulatory organization (?SRO?) rules in connection with its CMO sales practices. HSI registered representatives sold in excess of 250 different CMO to retail customers between January 1, 2004 and June 7, 2007, including approximately 50 inverse floating rate CMO, so-called ?inverse floaters.?

CMO are complex derivative securities which pool mortgage instruments and subsequently issue separate layers, or ?tranches,? comprised of various risks and other characteristics such as varying principal balances, coupon rates, prepayment risks and maturity dates."

If you think you may have suffered investment losses because of exotic securities like CMOs, you should consider consulting an experienced securities lawyer to learn about your legal rights.

Robert H. Rex is a partner at Dickenson, Murphy, Rex, and Sloan, P.A. and represents investors seeking recovery of investment losses from stockbrokers and brokerage firms.  Contact him either by telephone at 561-391-1900 or by using this convenient online form and set up a free consultation.

source:  http://nysbar.com/blogs/SecuritiesLitigation/2010/09/inverse_floaters_finra_fine_le.html

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