Tuesday November 24, 11:01 PM
British watchdog fines Nomura £1.75 mln
Britain's financial watchdog said on Tuesday it had fined Japanese bank Nomura 1.75 million pounds for "widespread" failures of systems and controls used in the trading of "high-risk" products.
Nomura avoided a bigger fine because it cooperated fully and swiftly with investigators regarding "mis-marking" at its London-based subsidiary Nomura International, the Financial Services Authority said in a statement.
In response, Nomura said it was moving on after a "full review" of its systems.
"The Financial Services Authority has fined Nomura International Plc 1.75 million pounds for widespread systems and controls failings around book marking within its International Equity Derivatives (IED) business," the FSA said.
"The systems and controls around marking the IED books fell far short of those expected by the FSA for a business trading complex and high-risk financial products."
The fine is worth the equivalent of 2.89 million dollars or 1.94 million euros.
Nomura meanwhile "failed to conduct its business with due skill, care and diligence and failed to take reasonable care to organise and control its affairs responsibly.
"The failings were particularly serious because they were fundamental and systemic and persisted over a prolonged period of time, until they were identified by Nomura in June 2008," the watchdog added.
FSA director of enforcement and financial crime, Margaret Cole, said the watchdog "will not hesitate to take action" when a company's systems and controls "fall short of required standards."
"Firms must ensure their systems and controls develop at the same rate their business operations grow; if this doesn't happen -- as in Nomura's case -- they run the risk of having systems that are inadequate for their business."
The Financial Services Authority added that Nomura escaped a higher fine totalling 2.5 million pounds as it "cooperated fully with the FSA and because it agreed to settle at an early stage of the FSA's investigation."
A Nomura spokesperson said in a statement: "Nomura identified the mis-marking in June 2008 and took immediate action.
"We conducted a full review and kept the regulator fully informed. Our response was prompt and transparent, as recognised by the FSA, and we now consider the matter behind us."
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