FT.com wrote: Nomura Holdings said on Tuesday that it had fired an employee who was being questioned by Japan’s Securities and Exchange Surveillance Commission on suspicions of insider trading. Japan’s largest securities firm said an employee had breached internal trading rules forbidding staff in the
investment banking department from trading shares.
The incident allegedly involved a relatively junior employee who had access to mergers and acquisitions information during his on-the-job training period in the Tokyo office, where he worked from February 2006 until the end of last year.
Under company rules, Nomura employees are required to conduct any market trading through accounts with Nomura, which allows such activity to be monitored. However, the employee in question allegedly traded through friends using an account at another broker.
Kenichi Watanabe, Nomura’s recently appointed chief executive, said on Tuesday: “We are a mirror of the stock market and that mirror should be straight at all times, so I am very sorry about what happened.”
He said the scandal would have a negative effect on the company, which recently experienced its largest management reshuffle in a decade. Some Japanese pension funds and other institutional investors have internal rules forbidding them from employing brokerages implicated in a scandal.
“Obviously, we believe we will be affected to some extent, since we have lost the trust of our customers,” said Mr Watanabe. The incident could also undermine regulators’ efforts to attract Japanese retail investors back into the stock market.
This year, the Japanese public has been shocked by insider trading allegations against staff at NHK, the public broadcaster, as well as against a certified public accountant who worked for Ernst & Young ShinNihon, Japan’s largest auditor.
Yoshimi Watanabe, Japan’s financial services minister, said he was dismayed that the incident occurred at a leading stockbroker and that the regulator would “deal strictly” with Nomura.
Nomura’s Mr Watanabe said the company would again review its internal controls, which the bank had tried to strengthen after an insider trading scandal in 2002.