Reports: Nomura To Suspend Some Operations, Implement Pay Cuts

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6/29/2012 12:36 AM ET

Japan's largest brokerage Nomura Holdings, Inc. (NMR: Quote) will implement a voluntary week-long suspension of some of its businesses and cut the pay of its top executives as part of its efforts to resolve insider trading problems at the company, according to media reports on Thursday.

Nomura reportedly plans to take some degree of responsibility for the insider trading problems after it found widespread weakness in its internal controls.

Nomura will cut the pay of top executives, including that of Chief Executive Kenichi Watanabe, and voluntarily suspend some of the company's operations. In addition, Nomura Securities may fire employees who leaked information.

According to media reports, Nomura will convene an emergency board meeting Friday to discuss the report and internal disciplinary action. Japanese financial regulators and Nomura have been probing allegations that the company's sales people leaked information in at least three cases of apparent insider trading under investigation by authorities.

Since March, Japan's Securities and Exchange Surveillance Commission has raised suspicions about Nomura Securities Co.'s involvement in three insider trading cases, including one that involves an information leak about Tokyo Electric Power Co.'s plan for a capital increase.

CEO Kenichi Watanabe is likely to hold a press conference later on Friday to unveil the preliminary results of the company's investigation. In early June, Nomura said it regretted that its employees were found to leak non-public information in some insider trading cases announced by the Securities and Exchange Surveillance Commission.

Nomura said at that time that it will cooperate fully in the ongoing inspection by the Commission. The company also said that an extensive internal investigation by a group of outside attorneys is also being conducted in light of the Commission's findings of involvement by Nomura employees.

NMR closed Thursday's trading at $3.52 on a volume of 339,300 shares.

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