Nomura Embroiled in Insider Trading of Elpida Shares in 2011

Bloomberg reports that a Nomura employee tipped off staff from Japan Advisory Ltd., a hedge fund advisory firm, about a share sale it managed for Elpida Memory Inc. in 2011, an official from the Securities and Exchange Surveillance Commission said at a news briefing Friday, speaking anonymously in accordance with the agency’s policy. Japan Advisory then traded Elpida shares, the SESC said.

Nomura has been embroiled in four of six cases unveiled this year as authorities crack down on trading based on tips provided by underwriters about clients’ equity offerings. The latest revelations underscore the task Chief Executive Officer Koji Nagai faces in proving to investors that internal controls have been tightened after the scandal cost it investment banking mandates and prompted his predecessor to resign.

'Nomura’s track record in leaking information has given companies, issuers and the market a great distrust of the bank', said Shiro Yoshioka, an analyst at Japaninvest Group Plc in Tokyo. 'Nomura will have to come up with clearer and stronger measures to ease them'.

The SESC’s findings were helped by an internal probe conducted by Tokyo-based Nomura, the official said.

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Nomura Embroiled in Insider Trading of Elpida Shares in 2011

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