CEO of Nomura, Japan’s Biggest Investment Bank, Quits Amid Insider Trading Scandal
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| YOSHIKAZU TSUNO/AFP/GETTY IMAGES Nomura CEO Kenichi Watanabe, right, announces his resignsation at a press conference at the company's headquarters in Tokyo on July 26, 2012, as his succesor Koji Nagai, left, looks on. |
Published on Thursday July 26, 2012
Malcolm Foster
The Associated Press
TOKYO — Nomura CEO Kenichi Watanabe has
resigned in the wake of an insider trading scandal that has tarnished the
reputation of Japan Inc. and its biggest investment bank.
Watanabe announced his resignation at a news
conference Thursday in Tokyo, ending his four year leadership of Nomura Holdings
Ltd. Takumi Shibata, another top executive at the bank, also resigned.
Watanabe, 59, will from Aug. 1 be replaced by
Koji Nagai, the president of Nomura Securities Co., which is part of the Nomura
banking empire and at the centre of the insider scandal.
Japan’s financial regulators are investigating
Nomura Securities for leaking information to clients ahead of planned securities
offerings by energy company Inpex, Mizuho Financial Group and Tokyo Electric
Power Co. in 2010.
Nomura has admitted that some its employees
were involved in leaking inside information.
“Our reputation has been badly damaged,” said
Nagai. “To try to restore trust is easily said, but to actually accomplish that
is a huge undertaking. Rather than just change our approach, we need to
fundamentally rebuild the company. All corporate employees need to be involved
in this,” he said.
A panel of external lawyers commissioned by the
company said in a June 29 report that its equity sales staff would seek
information from colleagues about upcoming offerings that Nomura was
underwriting and then pass along those tips to customers.
The panel made a series of recommendations to
prevent such incidents in the future, including banning conversations with
clients about rumours regarding financing transactions and using personal
cellphones for business.
Nomura is reportedly losing underwriting
business in wake of the scandal.
The company is still being investigated by the
Securities and Exchange Surveillance Commission and could face penalties.
Nomura’s share price has more than halved since
word of the investigation first surfaced in March, falling from 417 yen to 259
yen. It was up 5.7 per cent Thursday on reports of Watanabe’s resignation.
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