The UK Financial Services Authority has fined Nomura International £1.75m for control failures in its equity derivatives business which allowed a Hong Kong-based trader to mismark his positions.
Nomura gained a 30% discount on the penalty from £2.5m by settling the matter early. It must pay by December 1.
The FSA confirmed the penalty in a final notice issued to Nomura International on November 16, citing a “large number of serious failings in the due skill, care and diligence exercised in relation to book marking and organisation and control around book marking within Nomura’s international equity derivatives (IED) business”.
IED began in 2004 as part of the fixed income group and moved in June 2008 to the control of the equities group. It was based in London, where risks were booked, but had traders in New York, Tokyo and Hong Kong. The group traded for clients...