Nomura faces shutdown
Sunday 01 June 1997
Six months' closure is the maximum penalty under the Securities and Exchange Law. Nomura is suspected of breaking that law by compensating a sokaiya, or corporate blackmailer for investment losses.
This follows Friday's arrest of Nomura's former president Hideo Sakamaki, 61, in connection with 49.7m yen (pounds 260,000) in hush money that Nomura is suspected of paying to Ruichi Koike, a reputed corporate blackmailer.
The scandal could not come at a worse time for Nomura. Japan is promising sweeping deregulation of its financial markets and authorities, after years of lax regulation, are anxious to prove they have what it takes to police a free market.
If regulators find evidence of wrongdoing, the Ministry of Finance could order Nomura to stop selling to institutional customers and trading on its own accounts. Most analysts have predicted the ban would be for three months. It is not clear whether the London office would be affected.
Government penalties for a compensation scandal could wipe out hundreds of millions of dollars in Nomura's income. Revenue from in-house trading alone accounted for $1.8bn (pounds 1.1bn), a quarter of Nomura's total revenue, in the year ended March 1996.
The losses would compound the already serious drop in income as a handful of former clients bar Nomura from issuing their new securities and refuse to trade stocks and bonds through the brokerage. Customer flight could cost the brokerage 50bn yen in profit in the year to March 1998, estimates Takehito Yamanaka, an analyst at SBC Warburg Japan.
Analysts are confident Nomura will come roaring back to recapture lost market share after serving whatever penalty it gets.
- 1 Hair loss explained: How and why men go bald
- 2 Game of Thrones season 6: Jon Snow theorists believe the Stark may have a twin sister
- 3 Artist takes LSD, draws herself over different stages of the 9-hour trip to show its effects
- 4 A pint of water every day is the key to losing weight, scientists say
- 5 Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
Most expensive city to live in for expatriates: Luanda, Angola takes number one spot with Hong Kong and Zurich in top three
Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
Irish tourist filmed fighting with shopkeepers in Turkey says they 'messed with the wrong man'
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal get peerages
Moody neurotics are more likely to be creative geniuses, study says
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...
£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...
£25000 per annum + benefits: Ashdown Group: A large financial services company...
£20400 per annum: Ashdown Group: An established and highly reputable organisat...