HSBC Securities Censured and Fined $650K for Supervisory Failures
HSBC Securities (USA) Inc. (CRD NO. 19585) has reportedly been a FINRA member since July 1987 and is headquartered in New York, NY.
According to the Financial Industry Regulatory Authority (FINRA) on February 2, the regulator has sanctioned HSBC Securities (USA) Inc. with a censure and fine of $650,000 in connection with alleged violations of rules concerning fingerprinting.
Federal securities laws require FINRA member firms to fingerprint most associated persons when they associate with a firm. The firms then review the fingerprint results as part of their background check to assure that the individual is qualified and to rule out any criminal and/or regulatory events.
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.
According to FINRA, the Firm allegedly failed to maintain a reasonable supervisory system and procedures to identify and screen all individuals associated with the Firm in a non-registered capacity.
After HSBC self-reported this matter to FINRA, the firm executed a remedial review and screening process of non-registered associated persons at HSBC.
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