On September 8, 2015, the US Attorney’s Office for the District of Connecticut brought criminal charges, and the US Securities and Exchange Commission announced civil charges, against three traders at Nomura Securities International.
The traders were accused of lying to customers who were relying on such traders for honest and accurate pricing information with respect to certain residential mortgage-backed securities. As a result, the traders generated millions of dollars in additional revenue for Nomura. According to the SEC, the traders misrepresented the bids and offers being provided to Nomura for the securities, the prices at which Nomura purchased and sold RMBS, and the spreads the firm earned intermediating trades. The traders further directed junior traders to engage in similar behavior.
The US Attorney’s Office charges the traders with one count of conspiracy, two counts of securities fraud and seven counts of wire fraud – all of which carry terms of imprisonment. The SEC’s complaint charges the three traders with violating Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 and Section 17(a) of the Securities Act of 1933.
The US Attorney’s Office press release is available at: http://www.justice.gov/usao-ct/pr/indictment-charges-3-former-nomura-rmbs-traders-multiple-fraud-and-conspiracy-off enses; the SEC press release is available at: http://www.sec.gov/news/pressrelease/2015-181.html and the SEC complaint is available at: http://www.sec.gov/litigation/complaints/2015/comp-pr2015-181.pdf.