(Bloomberg) -- Nomura Holdings Inc. added a new risk the firm could face in a US regulatory filing, after a former employee was arrested in Japan on suspicion of robbery, arson and attempted murder.
Japan’s biggest brokerage added the risk of its employees or others conducting “criminal or other unlawful actions against customers or their families,” alongside other standard warnings about the potential for business misconduct and improper use of information, according to a 6-K report that was submitted to the US Securities and Exchange Commission this month.
The firm also reiterated that measures it undertakes to address such risks may not be effective in all cases, the filing said.
In the report, Nomura highlighted the two recent incidents that have shaken its reputation. One of them was the arrest of a 29-year-old former staff member, who is suspected of drugging an elderly customer and that person’s spouse, stealing cash from their home and setting it on fire. The other is a case of bond market manipulation that the firm admitted to and has been penalized for.
On Wednesday evening, Nomura said the former employee has been formally charged by Hiroshima prosecutors for the alleged crimes. He had been working for Nomura’s securities division when the alleged crimes happened in July.
“An incident like this must never happen at a financial institution entrusted with looking after its clients’ assets,” the firm said of the criminal case, which involved a customer of its flagship brokerage subsidiary Nomura Securities Co.
On the market manipulation case, the firm said certain clients suspended engagement with it for financial transactions, which may affect its revenues.
“We cannot make further comment beyond what’s been disclosed in the official filings,” a spokesperson for Nomura said in response to queries from Bloomberg News.
The brokerage made the addition to the 16th clause of a section that discusses risk factors. The 6-K report is meant to highlight material information that arises between annual and quarterly financial reports for foreign private issuers of securities in the US. Nomura has issued several bonds in the US.
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