Regions Bank misled a Mobile, Ala., sewer company about the riskiness of several swaps transactions and must pay $7.4 million in compensation, an arbitration panel has found.

The bank, a unit of Regions Financial (RF) in Birmingham, sold a series of complex interest rate swaps to Baldwin County Sewer and did not adequately communicate the financial risks associated with them, says Billy Bonner, a partner at the law firm of Cunningham Bounds who represents Baldwin. Baldwin used them in connection with variable interest rate bonds issued by the company and insured by Regions.

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