Major Japanese Bank CEO Steps Down
The CEO of Japan’s Nomura bank, Kenichi Watanabe, has resigned over a trading scandal in the country’s leading investment bank.
The Japanese bank’s ambitions to become a global competitor to the giants of Wall Street and Europe faded on Thursday as two top executives quit in an insider trading scandal that tarnished the reputation of the major financial institute.
The management shake-up was confirmed in a news conference on Thursday at the end of a day in Tokyo that also saw Watanabe’s top lieutenant Takumi Shibata’s resignation over leaks of insider information to clients of its securities unit in 2010.
The new CEO, Nagai, is a three-decade company veteran who took over as head of the Nomura’s domestic securities unit in April as part of a management reshuffle. He will inherit the task of placating clients and regulators as the bank stated on Thursday that the leak might be more widespread than previously announced.
The Securities and Exchange Surveillance Commission are still investigating the company and it could face penalties.
A panel of attorneys brought in by Nomura to investigate the insider trading cases said it found equity sales staff would regularly pump colleagues for inside information about upcoming stock offerings and then share tips with investors.
Nomura is awaiting possible sanctions from Japan’s Financial Services Agency, but the scandal has already cost it clients.
The Tokyo Stock Exchange is planning to set up a new body to screen the underwriters of new issues. They aim to prevent a reoccurrence of these insider trading cases.
If Japan’s markets are going to regain the global trust, the financial regulators are going to have to adopt global standards in dealing with these crimes.
Shares of Nomura have fallen in value by more than a third since the first insider trading case emerged in March.
Scandals have forced Nomura to change executive leadership twice since the burst of Japan’s asset bubble. In 1991, then-President Yoshihisa Tabuchi resigned after the brokerage admitted to compensating favored clients for stock losses.
In 1997, President Hideo Sakamaki stepped down after the bank was found to have channeled more than $3 million to a gangster in order to keep him from raising trouble at its 1995 shareholder meeting.
Press TV
