Japan Regulator to Ask Nomura to Report on Data Leak
(Bloomberg) -- Japan’s Financial Services Agency is set to order Nomura Holdings Inc. to submit a report on how client information was leaked to a rival firm, a person with knowledge of the matter said.
The regulator has asked Nippon Institutional Securities Co., the company that received the information from a Nomura employee, to provide a separate report, the person said, asking not to be identified because the matter is confidential. The FSA is seeking to find out more about the issue and the orders aren’t necessarily a precursor to any penalties against the firms, according to the person.
Nomura said Thursday that a staff member shared information on 275 corporate clients with a Nippon Institutional employee, a former colleague. The data included details on their dealings in exchange-traded funds and transactions with Nomura’s domestic brokerage arm, it said.
The incident is an early test for Nomura’s new Chief Executive Officer Kentaro Okuda, and comes after a previous information leak last year prompted the FSA to order compliance improvements. Okuda’s predecessor Koji Nagai, who is now chairman, faced a shareholder backlash and took a pay cut over the affair.
The Nikkei newspaper reported on the FSA’s requests earlier. Shingo Murooka, a spokesman at Nippon Institutional, confirmed that it received the order. Nomura spokesman Kenji Yamashita declined to comment.
Shares of Nomura fell 0.2% in Tokyo on Friday, taking this year’s decline to 4.4%.
Nippon Institutional, a unit of Nikko Asset Management Co., said a sales manager at the firm received client information from Nomura on multiple occasions between January and July of this year. The manager, a former Nomura worker who joined the firm last October, shared the data with two subordinates but there’s no evidence it was divulged further, it said Thursday.
The current Nomura employee printed out information on clients and passed it to the former colleague, people familiar with the matter said earlier. Both had worked together at a team within the global markets department that plans ETF products, one of the people said.
©2020 Bloomberg L.P.