Explanation
Acceptance is a risk management strategy that involves acknowledging the existence and potential impact of a risk, but deciding not to take any action to reduce or eliminate it. This strategy is usually adopted when the cost of implementing controls outweighs the benefit of mitigating the risk, or when the risk is deemed acceptable or unavoidable. In this case, the organization decided not to put controls in place because of the high cost compared to the potential fine, which means they accepted the risk. References:
https://www.comptia.org/blog/what-is-risk-acceptance

Explanation
A hardware security module (HSM) is a security device you can add to a system to manage, generate, and securely store cryptographic keys.
High performance HSMs are external devices connected to a network using TCP/IP. Smaller HSMs come as expansion cards you install within a server, or as devices you plug into computer ports.