Securities Lawyers Blog
The securities attorneys at Gana Weinstein LLP represent investors in their disputes with brokerage firms, such as HSBC Securities (USA) Inc.. Our firm can analyze your accounts and investments in order to determine if there was any broker misconduct in the handling of your accounts. Our analysis can reveal whether an investor has been a victim of misconduct such as unsuitable investments, unauthorized trading, excessive trading, or investment fraud.
HSBC Securities (USA) Inc. is the U.S. broker-dealer and investment adviser of HSBC, providing brokerage, investment advice, research, insurance products, and primary and secondary trading in U.S. and international equities, corporate bonds, futures, and options. Formed in 1969 and based at 452 Fifth Avenue in New York, the firm is an indirect wholly owned subsidiary of HSBC Holdings plc.
HSBC Securities (USA) Inc. – By the Numbers:
- CRD #: 19585
- Regulatory Events: 87
- Arbitration Events: 7
- Broker Employees: 1,208
HSBC Securities (USA) Inc. – Investment Advisors:
- SEC #: 64563
- Assets Under Management: $3,838,097,569
- ADV Form Employee: 490
HSBC Securities (USA) Inc. – In the News:
FINRA v. HSBC Securities (USA) Inc. (Case #2021071423301) – From June 2020 through March 2022, the firm violated FINRA Rules 6730(a) and 2010 by failing to timely report to the Trade Reporting and Compliance Engine (TRACE) approximately 5,635 transactions in TRACE-eligible corporate debt securities. In addition, from June 2020 to the present, the firm violated FINRA Rules 3110 and 2010 by failing to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with TRACE reporting requirements.
FINRA v. HSBC Securities (USA) Inc. (Case #2021073545201) – Between January 2013 and December 2021, each research report HSBC published contained inaccurate disclosures about the firm’s conflicts of interest. Specifically, HSBC published 67,482 equity research reports with approximately 275,000 disclosure inaccuracies in violation of FINRA Rules 2241(c) and 2010 and NASD Rule 2711(h). Similarly, between July 2016 and December 2021, each debt research report HSBC published contained inaccurate disclosures about the firm’s conflicts of interests. Specifically, HSBC published 2,470 debt research reports with approximately 39,000 inaccurate disclosures in violation of FINRA Rules 2242(c) and 2010. HSBC also did not establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with FINRA Rule 2241(c), FINRA Rule 2242(c), and NASD Rule 2711(h). As a result, HSBC violated FINRA Rules 3110 and 2010 and NASD Rule 3010.
FINRA v. HSBC Securities (USA) Inc. (Case #2019063432006) – Between July 2017 and September 2020, HSBC failed to take reasonable steps to ensure that intermarket sweep orders it routed to certain market centers met the requirements set forth in Rules 600(b)(30) and 600(b)(31) of Regulation National Market System (NMS) of the Securities Exchange Act of 1934, in violation of Rule 611(c) of Regulation NMS and FINRA Rule 2010. During this same period, HSBC failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with Rule 611(c), in violation of FINRA Rules 3110 and 2010.
FINRA v. HSBC Securities (USA) Inc. (Case #2018059528401) – Federal securities laws require that FINRA member firms fingerprint most associated persons prior to or upon association with a firm. A firm reviews the fingerprint results as part of its background check to determine, among other things, whether a prospective associated person has previously engaged in misconduct that subjects that person to a statutory disqualification. As set forth in Section 3(a)(39) of the Securities Exchange Act of 1934 (Exchange Act), certain criminal and regulatory events will subject a person to a statutory disqualification. Between January 1, 2011 and March 25, 2019, HSBC failed to reasonably screen 2,191 non-registered associated persons for statutory disqualification. Specifically, HSBC fingerprinted these non-registered associated persons and screened them under Section 19 of the Federal Deposit Insurance Act, but did not screen them for statutory disqualification under the broader requirements of the Exchange Act. The Firm’s failure to properly screen its non-registered associated persons resulted from its failure to maintain a reasonable supervisory system and procedures to identify and screen all individuals associated with the Firm in a non-registered capacity. The Firm self-reported this matter to FINRA and commenced a remedial review and screening process of non-registered associated persons at HSBC. As a result of the foregoing, HSBC violated NASD Rule 3010 (for conduct occurring before December 1, 2014) and FINRA Rules 3110 (for conduct occurring on and after December 1, 2014) and 2010.
FINRA v. HSBC Securities (USA) Inc. (Case #2017053137201) – From May 2003 to the present (the “Relevant Period”), the Firm failed to maintain electronic broker-dealer records in non-erasable and non-rewritable format, known as WORM format, as required by Section 17(a) of the Exchange Act, Exchange Act Rule 17a-4(f)(2), NASD Rule 3110 and FINRA Rule 4511. WORM stands for “write once, read many,” and is intended to prevent the alteration or destruction of records stored electronically. During the Relevant Period, the Firm failed to maintain in WORM format electronic records related to approximately 12.36 million transactions in exchange traded funds, equities and fixed income products. The Firm also failed to (i) provide 90-day notice to FINRA, its designated examining authority, prior to using electronic storage media, (ii) implement the required audit system for inputting records in electronic storage media, and (iii) obtain an attestation from its third-party vendor that the vendor will provide to regulatory authorities records stored electronically in the event the Firm is unable to do so, in violation of Exchange Act Rule 17a-4(f), NASD Rule 3110 and FINRA Rule 4511. Finally, the Firm failed to have adequate written supervisory procedures relating to its compliance with record retention requirements, in violation of NASD Rule 3010 and FINRA Rule 3110.
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