Nomura fined US$35 million over mortgage-backed securities

NOMURA Securities International agreed to pay US$35 million as part of a non-prosecution agreement with the federal government over residential mortgage-backed securities trading fraud dating back more than a decade.

Nomura, a US-based broker-dealer subsidiary of Japanese financial services firm Nomura Holdings, will also pay almost US$808,000 in restitution to victims of the scheme, the Connecticut District of the US Attorney’s Office said in a statement on Tuesday (Aug 22). The firm previously paid more than US$20 million to victims as part of a settlement with the US Securities and Exchange Commission.

“Nomura is pleased to have resolved the matter and grateful that the DOJ recognised the firm’s remediation and cooperation,” a representative for the bank said in an e-mailed statement. “The resolution will have no material financial impact as the agreed sanctions were recognised in prior periods.”

A government investigation found Nomura misrepresented “material facts” to “deceive and cheat its customers in trades”, according to the statement. In some instances, employees lied to the buyer about the seller’s asking price, or vice versa. In other cases, Nomura said bonds it held were being sold from a third party and charged an “extra, unearned commission” on the sale.

Nomura employees were active participants in the scheme, which took place from 2009 to 2013 and primarily from the company’s trading floor in New York City, according to the statement. BLOOMBERG