Picture: ISTOCK
Picture: ISTOCK

Tokyo — Nomura Holdings says information on corporate clients was leaked by an employee to a securities firm, little more than a year after it was hauled up by the financial regulator for lax controls.

An internal investigation found that data on 275 companies, mainly financial institutions, was leaked to Nippon Institutional Securities, Nomura said on Thursday. It included information on dealings in exchange traded funds and transactions with Nomura, the Tokyo-based brokerage said.

The worker shared the information at the behest of a former Nomura staff member who is now employed by Nippon Institutional Securities, a unit of Nikko Asset Management, Nomura said.

The incident is an early test for Kentaro Okuda, who became CEO at Japan’s biggest brokerage in April. It follows an information-leak scandal in 2019 that prompted the Financial Services Agency to order compliance improvements and led bond issuers to drop the company from underwriting deals.

Nomura apologised for the latest case and pledged to strengthen the management of customer information. It will consider taking actions including legal measures, it said.

Nippon Institutional said a sales manager at the firm received client information from Nomura on multiple occasions between January and July 2020. The manager, a former Nomura worker who joined the firm in October 2019, shared the data with two subordinates but there’s no evidence it was divulged further, it said in a statement.

FSA officials weren’t immediately available to comment.

The incident shows that Nomura must do more to make staff aware of the need to safeguard information, said Hironari Nozaki, a Toyo University professor.

“There is room to review their organisational efforts to make employees more mindful of compliance,” said Nozaki, a former Citigroup bank analyst.

Shares of Nomura closed 1.2% higher before the announcement, paring this year’s decline to 4.2%.

The 2019 issue involved the improper sharing of information with institutional investors on potential changes to the composition of the Tokyo Stock Exchange. Okuda’s predecessor Koji Nagai, who is now chair, faced a backlash from investors after the revelations and was forced to take a pay cut.

The business improvement order that ensued was the first for Nomura since 2012, when the company was embroiled in an insider-trading scandal that led to the then CEO’s resignation.

Bloomberg

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