Insider Trading Scandal Fells Nomura Chief

Nagai, who has been with the bank for 30 years, said he intended to provide Nomura with a “new global strategy.” He added that he would not abandon the bank’s goal of being a global investment bank centered in Asia. He was quoted saying, “We will make bold choices of what we will focus on. We will not simply stick to how we did things in the past.”

Nomura also warned that it was probable that additional cases of insider trading would be uncovered. CFO Junko Nakagawa offered apologies for the scandal and said that the bank would strengthen internal measures to halt such actions. In the report, she said, “I can’t say that there is no impact on our earnings. It is difficult at this stage to numerically estimate the possible damage. All we want to do is make efforts to regain trust.”

Watanabe had been expected to resign since reports surfaced that regulators accused Nomura of failing to respond quickly to an investigation of rampant instances of insider trading in the Tokyo market.

Nomura admitted leaking information on share offerings by Inpex, and energy firm; Mizuho Financial Group; and Tokyo Electric Power. Equity sales staff in the institutional sales department were found by investigators to have sought out inside information on planned stock offerings from colleagues that they then passed on to investors.

Japan’s Financial Services Agency (FSA) could sanction the firm, which has already lost clients thanks to the scandal. Asset managers seeking to stay in compliance with their own rules have abandoned trading with Nomura, and the firm has also been denied the opportunity to participate in a government sale of $6 billion in shares of Japan Tobacco.