You are here

Nomura is said to suspend two junk-bond traders in London

[LONDON] Nomura Holdings suspended a London-based trader and his boss, according to people with knowledge of the matter.

Shaun Barlow, the head of high-yield bond trading at the Japanese brokerage's London office, and Jeremy Gosling, a trader who reports to Mr Barlow, were suspended in the past few weeks, said the people, who asked not to be identified as the details are private.

Mr Barlow didn't respond to phone calls and written messages seeking comment, while Gosling declined to comment. Nomura also declined to comment.

Nomura traders in London were informed about the suspensions this month and told that some of the team's junk-bond positions may have been mispriced, two of the people said. James Milligan, head of European flow credit, briefed some of the staff on the suspensions, the people said. Mr Barlow reports to Omar Ghalloudi, the people said. Mr Ghalloudi joined the bank from Citigroup in November.

Mr Milligan didn't respond to requests for comments, and Mr Ghalloudi declined to comment.

In the decade since the financial crisis, banks around the world have paid more attention to how they value harder-to-trade debt securities, such as those backed by mortgages, or loans financing leveraged takeovers. Regulators and banks have cracked down on suspected instances of so-called mismarking, in which traders misrepresent the true value of securities.

Personnel problems in London may add to Nomura's recent struggles with performance beyond its base in Tokyo. The lender shuttered a unit in the U.K. capital that made wagers with shareholders' funds, known as proprietary trading, after losses, Bloomberg reported in October.

Revenue from its investment-bank unit for Europe, the Middle East and Africa tumbled 22 per cent to 30.8 billion yen (S$366.26 million) in the three months ended September because of a "weaker performance" in fixed-income trading, mirroring year-on-year slumps at some of its biggest rivals. The lender "barely managed to stay in the black overseas," chief financial officer Takumi Kitamura told reporters in October.