Nomura Securities International (NSI), the U.S.-based broker-dealer subsidiary of Japan’s Nomura Holdings (NYSE:NMR), has reached a $35 million settlement with the U.S. Department of Justice relating to its fraudulent trading of residential mortgage-backed securities (RMBS) between 2009 and 2013. The company will also pay approximately $808,000 in restitution to victims of the scheme.
According to the charges brought against the company, NSI dishonestly offered “material facts” in an effort to “deceive and cheat its customers in trades.” Some of this behavior involved lying to a buyer about the seller’s asking price, or vice versa. In other cases, Nomura falsely claimed that the bonds it held were being sold from a third party, thus enabling it to charge an “extra, unearned commission” on the transaction.
The scheme mostly occurred on the company’s trading floor in New York City. However, the settlement was announced by the Connecticut District of the U.S. Attorney’s Office. NSI had previously paid $20 million in a settlement with the U.S. Securities and Exchange Commission related to this occurrence.
“The agreement announced today addresses only the corporate criminal liability of NSI and not criminal charges for any individual,” said the U.S. Attorney’s Office in a statement. “Several former NSI employees have been charged in connection with NSI trading activities.”
In an emailed statement to Bloomberg, a Nomura spokesperson said the company was “pleased to have resolved the matter and grateful that the DOJ recognized the firm’s remediation and cooperation. The resolution will have no material financial impact as the agreed sanctions were recognized in prior periods.”
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