Nomura Holdings Inc. (8604), Japan’s biggest brokerage, fell in Tokyo trading following a report that the country’s financial watchdog will recommend a penalty for its role in cases of insider trading tied to share sales.
Nomura slipped 1.2 percent to 256 yen as of 10:34 a.m. on the Tokyo Stock Exchange after earlier dropping as low as 254 yen. The Securities and Exchange Surveillance Commission will seek a penalty after the brokerage allegedly leaked insider information on sales of Inpex Corp. (1605) and Mizuho Financial Group Inc. (8411) shares, the Mainichi newspaper said, without citing anyone.
Japanese regulators have been probing trading related to the equity offerings in response to criticism from investors who allege that leaks on financing plans are eroding confidence in the market. Nomura was involved in an insider-trading case connected to Inpex’s 2010 share offering, a person with knowledge of the matter said in March.
“Illegal insider conduct related to public offerings harms market reliability,” Shozaburo Jimi, the country’s financial services minister, said at a press conference in Tokyo, while declining to comment on the report. “We will collaborate with overseas regulators and monitor the market with the goal of transparency and fairness.”
Keiko Sugai, a Tokyo-based Nomura spokeswoman, also declined to comment.
The SESC in March reprimanded the underwriter involved in the Inpex insider-trading case, without naming the firm or commenting on potential penalties.
A fund manager at Chuo Mitsui Asset Trust & Banking Co. obtained non-public information on on June 30, 2010, from an employee of one of the lead underwriters for Inpex’s sale, the commission said at that time. That was days before the official July 8 announcement of the offering by Japan’s biggest energy explorer, the SESC said.
An employee of Chuo Mitsui Asset, a unit of Sumitomo Mitsui Trust Holdings Inc. (8309), traded on the information, according to the SESC. Goldman Sachs Group Inc., Mizuho Securities Co. and JPMorgan Chase & Co. were also underwriters.
The SESC recommended fining Chuo Mitsui Asset 50,000 yen ($628) for the alleged breach, an amount that corresponds to the fees the company earned from selling Inpex shares for customers.
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