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(Bloomberg) — Japan’s financial watchdog plans to recommend fining Nomura Holdings Inc. for allegedly manipulating the government bond futures market, the Yomiuri newspaper reported.
A manager in the Global Markets division is suspected of fraudulently moving prices in government bond futures around 2021, the newspaper reported, citing unidentified sources. The dealer allegedly made profits by placing large orders without intending to buy or sell, and then canceling them, according to the report.
The Securities and Exchange Surveillance Commission is expected to recommend a penalty in the tens of millions of yen range as soon as this afternoon, according to the report.
The SESC declined to comment before a briefing scheduled for 4 p.m. in Tokyo. Nomura takes the matter seriously, including by confirming the facts, a company spokeswoman said, declining to comment further.
Shares of Nomura, Japan’s biggest brokerage, closed 1.5% lower in Tokyo on Wednesday.
Securities firms have been penalized for manipulation of the Japanese government bond futures market in the past.
Citigroup Inc. was fined ¥133 million ($928,000) in 2019 and suspended from the primary group of dealers that participate at certain Japanese government bond auctions. A year earlier, Mitsubishi UFJ Financial Group Inc.’s securities venture with Morgan Stanley received a ¥218 million penalty and was also suspended from the group. The venture was also dropped as an underwriter of several corporate bond deals.
(Updates with comment from Nomura in the fourth paragraph)
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