Japan's Nomura to cut executive pay over leaks

Top Japanese brokerage Nomura Holdings said Friday that it would temporarily cut its most senior executives' pay by as much as half in the wake of an embarrassing insider trading scandal at the firm.

Nomura announced the penalties at a hastily convened press briefing at its Tokyo headquarters where it also released the findings of a damning report into the leaking of material information by some of its employees.

The report said Japan's biggest brokerage was overrun with "serious systemic defects that would erode confidence in (Nomura) as a securities company".

Two compliance and institutional equity sales executives would resign, while Nomura also said it would suspend operations at its institutional sales department for three to five business days as it reviews its operations amid the spiralling crisis.

Nomura's top executives would take temporary pay cuts of between 10 and 50 percent, with Chief Executive Kenichi Watanabe's compensation to be chopped in half for six months, the company said.

Nomura paid Watanabe about 128 million yen ($1.6 million) in its latest fiscal year, according to a company filing.

"We sincerely apologise for causing a loss of confidence in this country's securities markets and we deeply regret the inconvenience we have caused all those affected," it said in a statement.

Watanabe, who said he would not resign, told reporters that "after reviewing the investigation reports, we acknowledge internal problems".

The report by a group of outside lawyers that Nomura hired to investigate its practices catalogued a culture that turned a blind eye to insider trading, which is illegal in Japan but usually carries token fines.

Sales staff tipped off clients about share sales and information often flowed freely between sales and Nomura's investment banking and research side, usually barred through a so-called Chinese Wall, the report said.

There was little or no training for younger employees about their ethical responsibilities, and "some instances of excessive entertainment of particular clients were found to be contrary to business ethics", it added.

Although it usually draws huge fines and jail time in the West, insider trading is largely tolerated in Japan with recent fines coming in at around just $1,500, while criminal convictions are few and far between.

But there has been renewed pressure to crack down on lax regulations and legal loopholes, which have dented Japan's corporate governance image.

Local media reports about the impending pay cuts earlier Friday sent Nomura shares 3.88 percent higher at 294 yen in Tokyo.

Japan's market regulators are probing a series of insider trading cases as they ramp up their investigation of the widespread practice.

"Rigorous measures will be taken in line with the law," Financial Services Minister Tadahiro Matsushita told a news briefing Friday in response to questions about insider trading.

On Thursday, Japan's top-selling Yomiuri Shimbun newspaper said Tokyo's bourse would search the offices of dozens of brokerage houses as part of a wider investigation.

Earlier this month, Japan's market watchdog called for a New York firm to be slapped with a 14.7 million yen penalty for trading on confidential information about a $6.3 billion share sale by Tokyo Electric Power (TEPCO) in 2010.

That was its first-ever action against a foreign company for insider trading.

The probes by the Securities and Exchange Surveillance Commission have also focused on share sales reportedly underwritten by US-based investment bank JPMorgan.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • ‘Next leader must not be newbie’
    ‘Next leader must not be newbie’

    Vice President Jejomar Binay believes the next president of the Philippines must have vast experience and a long track record in governance and in dealing with crises. “I am very much convinced that the local government is the best training ground for those who want to run for national government positions,” he said. Binay said he is determined to run for president in 2016 on the strength of his competence and track record. …

  • Massacre suspect tests negative for poisoning
    Massacre suspect tests negative for poisoning

    A suspect in the Maguindanao massacre case who had been examined at the Philippine General Hospital (PGH) tested negative for poisoning, medical records released yesterday showed. However, the Quezon City court handling the multiple murder case resolved to isolate Police Officer 1 Pia Kamidon from the rest of the accused detained at Camp Bagong Diwa in Taguig for his safety. In a two-page order, Regional Trial Court Branch 221 assisting Judge Genie Gapas-Agbada ordered jail officials to …

  • ‘Homework first before Facebook’
    ‘Homework first before Facebook’

    President Aquino elicited laughter from students here as he reminded them to open books first before Facebook. “Finish your assignments first before making a raid in the Clash of Clans,” Aquino said, referring to a popular online game. In a speech during the turnover yesterday of two new three-story buildings at the Tarlac National High School, he said the government could only provide opportunities for learning but the rest of the work would be up to the students. The new school buildings …

  • Espina resignation confirmed; Noy looks for replacement
    Espina resignation confirmed; Noy looks for replacement

    President Aquino ended speculations yesterday and confirmed that Deputy Director General Leonardo Espina had indeed resigned as officer-in-charge of the Philippine National Police. As of this time, we are conducting various interviews and checks on the various candidates,” Aquino told reporters at the Tarlac National High School in Tarlac City. Aquino had kind words for Espina, saying that he stood by and defended the 44 slain police Special Action Force (SAF) commandos in the operation in …

  • Palace welcomes G7 concern over sea reclamation
    Palace welcomes G7 concern over sea reclamation

    President Aquino welcomed yesterday the Group of Seven industrialized countries’ expression of concern over rising tension in the West Philippine Sea and South China Sea, calling it a clear indication of the global scope of the problem ramped up by China’s massive reclamation activities in disputed waters. In Tarlac City where he led the turnover of new classrooms, Aquino told reporters that goodwill and not tension must prevail in the West Philippine Sea and South China Sea, where territorial …

  • DepEd, TESDA tie up for K to 12
    DepEd, TESDA tie up for K to 12

    The Department of Education (DepEd) has partnered with the Technical Education and Skills Development Authority (TESDA) in the first two years of implementation of the K to 12 program. “We will use TESDA centers as technical-vocational laboratories for senior high school,” DepEd Secretary Armin Luistro said during the inauguration of 30 new classrooms at the Tarlac National High School yesterday. The classrooms were constructed in partnership with the Philippine Amusement and Gaming Corp. …

  • SE Asia Stocks-Philippine falls on foreign selling; others flat to weaker

    BANGKOK, April 17 (Reuters) - Southeast Asian stock markets ended flat to weaker on Friday as Philippine stocks slid on selling led by foreign funds and Singapore shares extended losses with investors ... …

  • Philippine Airlines parent says back in black
    Philippine Airlines parent says back in black

    Philippine Airlines' parent firm said it had returned to profitability, the first time in three years either entity reported being in the black for an entire year. In a filing with the Philippine Stock Exchange Thursday, PAL Holdings reported an after-tax net profit of 129.74 million pesos ($2.93 million) in its fiscal year to December 31. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options