Japan watchdog wants order against Nomura for insider cases
TOKYO, July 31 – Japan’s securities market watchdog recommended today that Nomura Securities be given an administrative order to improve its compliance practices as punishment for its involvement in three insider trading cases dating back to 2010.
The recommendation moves Japan’s largest brokerage closer toward a resolution of a costly scandal that triggered the resignations of Chief Executive Kenichi Watanabe and his top lieutenant Takumi Shibata last week.
The relatively light administrative sanction against Nomura would cap a special investigation that began in April as part of an effort by regulators to crack down on insider trading practices that critics say had become widespread in the Tokyo market in recent years.
Japan’s Financial Services Agency, which oversees the SESC, will decide on a sanction for Nomura in the coming weeks, officials have indicated.
Nomura has said it was involved in leaks of information on three share issues in 2010: by Mizuho Financial Group, energy firm Inpex Corp and Tokyo Electric Power .
Investors tipped off to those share issuance plans looked to profit by selling the shares in advance of the announcement since the deals dilute the stakes of existing shareholders.
The resignation of Watanabe and Shibata helped clear the way for the SESC to recommend a relatively light sanction against Nomura, regulatory sources have said.
While Nomura will have to demonstrate a plan to improve its compliance practices, that will be less costly than the more disruptive order to suspend some operations it might have faced in a worst-case outcome. – Reuters