An NASD arbitration panel found HSBC Brokerage (USA) Inc., liable for $776,000 for negligent misrepresentations and omissions in the sale of a structured note. On Friday, May 4, 2007, the NASD panel awarded $776,000 to Rayburn Enterprises and a related trust. Rayburn Enterprises was represented by Dempsey & Johnson, a Los Angeles, California law firm.
“It was clear that HSBC personnel failed in their fundamental duty to understand the basic features of the product they were selling and to ensure that it was suitable for my clients. The documents and the testimony from HSBC’s own employees demonstrated that HSBC sold risky, illiquid investments to an inexperienced investor who came to HSBC seeking a low risk, income generating product,” said Michael Dempsey, who tried the case.
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