TOKYO – Some of Japan’s largest financial institutions have halted trading securities with Nomura Holdings as the fallout from its market manipulation scandal spreads, according to people familiar with the matter.
At least 10 firms, which include major life insurers, trust banks and asset management firms, have temporarily suspended some business activities with Nomura because of the breach, the people said. The firms may resume their equity or bond dealings with Nomura when there are further developments, such as when the brokerage details steps to prevent a recurrence, they said.
“As it is up to our clients to make decisions regarding individual transactions, we are not in a position to answer,” a spokesperson for Nomura said in response to queries from Bloomberg News.
The trading halts deepen woes for Japan’s biggest brokerage, which has taken hits on multiple fronts after the authorities said in September that an unidentified employee manipulated government bond futures in 2021 by placing large orders without intending to buy or sell all of them.
In response, Japan’s Finance Ministry stripped the brokerage of primary dealer privileges at government debt auctions for a month. Many companies, including Toyota Finance, have taken their bond underwriting business elsewhere, leading to a fall in league table rankings and market share for Nomura.
Nomura admitted to Japan’s financial regulator that it had manipulated the bond market, following an investigation by the securities watchdog. Chief executive officer Kentaro Okuda apologised earlier in October, in his first public appearance following the allegations.
The loss of clients, if only briefly, is a setback for the brokerage that is just returning to profitability after moving past several global missteps, including an almost US$3 billion (S$3.9 billion) loss from the collapse of investment firm Archegos Capital Management. Nomura saw its annual profit grow for the first