FT. LAUDERDALE, Fla., Sept 26, 2011 /PRNewswire/ -- A Honduran investor has filed claim against HSBC alleging that an investment described as a "Washington Mutual" perpetual bond was not a bond at all, but a derivative mortgage backed security, created by Washington Mutual, to take toxic home equity loans off its books.
The claim, filed with the Financial Industry Regulatory Authority (FINRA) by the law firm of Securities Fraud Attorney Mark A. Tepper, alleges that HSBC through its Miami office, misrepresented the security and omitted to disclose other material risks, including that the income from the investment was dividend income, not interest; that the dividends were not cumulative; that there was no protection for his principal nor a maturity date; and over concentrated 41% of Claimant's account in one speculative security that had a limited market.
"Unbeknownst to Claimant, the Washington Mutual "bond" was not a bond. In fact, it was a mortgage-backed preferred stock in Washington Mutual Preferred Funding (Cayman) I Ltd. ('Cayman Preferred stock')," the claim alleges.
The claim contends that the Claimant "had no investment experience in U.S. markets" and that HSBC "put Claimant in harms way" and "breached its duty to supervise despite red flags (indications of wrongdoing), by failing to detect and prevent its registered representatives' unsuitable activities in Claimant's account."
About Mark A. Tepper, P.A. (www.MarkTepper.com)
Attorney Mark Tepper has earned the reputation of "Investor Advocate" while practicing law for over 30 years and representing the individual investor. FINRA arbitrators recently upheld claims filed by Tepper against a number of large financial services companies, recovering investor losses from Merrill Lynch for a high risk investment in Fannie Mae Preferred Stock, Charles Schwab YieldPlus, and Wachovia - now Wells Fargo. Pending cases include claims against UBS. A member of the Florida, New York and California Bars, Mr. Tepper is AV®-rated, the highest rating of lawyers in the Martindale-Hubbell Law Directory.
Mark Hopkinson, NewsMark Public Relations
SOURCE Mark A. Tepper, P.A.