The Japan Securities Dealers Association fined Nomura Holdings $3.8 million, the largest fine handed down by the regulatory group in more than a decade. The fine follows disclosures this summer that the financial services conglomerate leaked information to traders ahead of its clients’ planned secondary share offerings. When a company issues more shares in the market, shareholder interest is diluted and share prices generally fall.
The scandal cost Nomura more than just the fine. After learning of the leaks, Nomura understandably lost clients. In July, Nomura’s chief executive and chief operating officer resigned over the scandal.
Nomura may not have been the only investment bank to leak client information in a country where regulation has traditionally been lax. Japan’s Financial Services Agency asked more than 12 investment banks for their plans to safeguard client information as it became clear that Nomura was not an outlier.
Sources and Coverage:
Bloomberg, by Takahiko Hyuga, Nomura Gets Biggest Fine in 12 Years by Japan Brokers Group
New York Times Dealbook, by Hiroko Tabuchi, Nomura Chief Resigns Over Insider Trading Scandal
The Wall Street Journal, by Atsuko Fukase and Kana Inagaki, Nomura Frozen Out of Deals Amid Scandal
Financial Times, by Michiyo Nakamoto, Nomura Admits Insider Trading Mistakes
Bloomberg, by Takahiko Hyuga, Goldman Joins JPMorgan in Promising Better Japan Controls