CUSTOMER CLAIMS INVESTMENT WAS MARKETED TO HER AS "LIQUID" AND ABOVE ALL, "SAFE." THIS CUSTOMER COMPLAINT INVOLVES ONE OR MORE AUCTION RATE SECURITIES WITH A NOTIONAL VALUE OF $5000000.00 WHICH HAVE BEEN THE SUBJECT OF A FAILED AUCTION.

$5,000,000.00

ON 6/12/08, HSBC SECURITIES (USA) INC. AGREED TO VOLUNTARILY REPURCHASE THE ARS SECURITIES AT ISSUE FROM THE CUSTOMER AT PAR VALUE IN ORDER TO PROVIDE LIQUIDITY UNDER UNPRECEDENTED MARKET DEVELOPMENTS TO THE EXTENT THAT A CUSTOMER'S ARS POSITION(S) COULD NOT BE SOLD AND WAS NOT REDEEMED BY THE ISSUER. THE NAMED REPRESENTATIVE WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND THE CUSTOMER; THE NAMED REPRESENTATIVE DID NOT MAKE ANY PAYMENTS TO THE CUSTOMER; AND THE NAMED REPRESENTATIVE WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE REPURCHASE AMOUNT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.

CUSTOMER CLAIMS INVESTMENT IS IN CONTRADICTION TO HIS LIQUIDITY REQUIREMENTS AND INSTRUCTIONS. THIS CUSTOMER COMPLAINT INVOLVES ONE OR MORE AUCTION RATE SECURITIES THAT HAS BEEN THE SUBJECT OF A FAILED AUCTION.

$750,000.00

ON 3/22/08, HSBC SECURITIES (USA) INC. AGREED TO VOLUNTARILY REPURCHASE THE ARS SECURITIES AT ISSUE FROM THE CUSTOMER AT PAR VALUE IN ORDER TO PROVIDE LIQUIDITY UNDER UNPRECEDENTED MARKET DEVELOPMENTS TO THE EXTENT THAT A CUSTOMER'S ARS POSITION(S) COULD NOT BE SOLD AND WAS NOT REDEEMED BY THE ISSUER. THE NAMED REPRESENTATIVE WAS NOT A PARTY TO, AND DID NOT AGREE TO OR PARTICIPATE IN, THE REPURCHASE AGREEMENT BETWEEN THE FIRM AND THE CUSTOMER; THE NAMED REPRESENTATIVE DID NOT MAKE ANY PAYMENTS TO THE CUSTOMER; AND THE NAMED REPRESENTATIVE WAS NOT ASKED TO AND DID NOT CONTRIBUTE TO THE REPURCHASE AMOUNT. THIS MATTER IS BEING REPORTED AS A SETTLEMENT PURSUANT TO THE REQUIREMENTS OF FINRA REGULATORY NOTICE 09-12.