NASD hits HSBC with fine

NASD has fined New York's HSBC Brokerage $250,000 for failing to ensure best execution of its government securities orders.

NASD has fined New York’s HSBC Brokerage $250,000 for failing to ensure best execution of its government securities orders.
The announcement was made today, after it was determined that starting from late 2003 through May 2004, the brokerage routed orders to a then-affiliate firm, HSBC Securities without adequately supervising HSI to ensure that its clients were provided the best execution.
NASD found that by December 2004, close to 100% of HBI’s government securities trades were placed by HSI.
“HBI put its customers’ orders at risk by failing to monitor these orders to ensure that it was getting best execution,” James S. Shorris, NASD’s executive vice president and head of enforcement said in a statement.
“That risk was heightened when the firm began routing orders internally to its affiliated broker-dealer, without being able to demonstrate any supervisory review to evaluate whether its affiliate provided the best execution.”
HBI settled the fine without admitting or denying the charges, but consented to NASD’s arbitration.
Since having merged in April 2005, HSI and HBI are today called HSBC Securities.