On Thursday, the company’s CEO, Kentaro Okuda, along with other executives, announced that they would be cutting their pay. following the news That a Nomura employee manipulated the Japanese bond market.
Okuda has he agreed to return 20% of his salary for two months, along with the executive vice president of global markets, the vice president and many other executives—although some only get 10% back.
Moreover, within an hour of the announcement, the news spread A former employee of Nomura was arrested on suspicion of robbery, arson and attempted murder.
Kyodo news, Japan’s flagship store, notify The 29-year-old man was working at Nomura when he allegedly committed the crimes. The man allegedly drugged a Nomura client and his partner before stealing the equivalent of $170,000 from the house and setting it on fire. (The couple, in their nineties, reportedly ran away.)
A Nomura representative refused of luck request for comment, but a spokesperson say Bloomberg “Extremely regrettable that one of our former employees has been arrested.”
(Market manipulation) crime scene
Japan’s Financial Services Agency (FSA) exposed the manipulation of the bond market in September It reported that on one day in March 2021, a Nomura employee made “misleading orders” in the government bond futures market, and then made a profit without intending to buy or sell the orders placed.
The move, Japan’s FSA said, is called “layering.”
Per Summary of Nomura According to the event, “an employee involved in proprietary trading placed multiple sell orders on the Osaka Exchange to layer the order book for Japanese government bond (JGB) futures at the best bid or lower prices, while buying the same JGB futures at a lower price. , and placing multiple buy orders at best bids or lower prices to layer the bid-order book, while JGB sells the same futures at a higher price.
The employee’s “series of derivatives transactions and orders misled the market into believing that futures trading was increasing, and may have caused fluctuations in futures prices on the Osaka Stock Exchange,” the company said.
the sources say Bloomberg The employee who was making the orders has left Nomura. Many Nomura clients and institutional investors have also left, the sources added.
Paying the boss
In a statement on Thursday, Nomura took possession of the situation “We apologize to our customers and all other interested parties for the inconvenience this has caused,” the company wrote.
“We take this matter very seriously. We will continue to further improve our compliance framework and internal controls to prevent similar incidents from occurring in the future and restore trust.”
in one attached statement Also released Thursday, the company outlined a list of new rules aimed at ensuring similar problems don’t happen again. “By fully implementing these measures, we will further enhance our compliance framework and internal controls to prevent similar incidents and restore trust,” he wrote.
Meanwhile, the bosses are paying. Okuda earned $3.2 million this year, for Bloombergthat is, with his 20% return, he is returning approximately $640,000.
However, earnings remained strong
The one-two punch of overwhelming press has come at a time when Nomura was otherwise doing quite well. According to him second quarter earnings was released on Friday, more than doubling earnings. In fact, it had the biggest profits in four years and the sixth consecutive quarter of growth.
Okuda will likely ease with growth. In addition to his salary, Nomura was recently ordered to pay a $144,000 fine as a result of the manipulation, and according to Reuters “It has temporarily lost its position as the leading seller of government bonds.”
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