Nomura CEO quits as insider trading scandal widens

Thu Jul 26, 2012 8:16am EDT
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By Emi Emoto and Nathan Layne

TOKYO (Reuters) - Nomura Holdings Inc (8604.T: Quote) CEO Kenichi Watanabe resigned on Thursday over a widening insider trading scandal and will be replaced by company veteran Koji Nagai, as Japan's top investment bank warned additional cases could come to light.

The management shake-up was confirmed in a news conference at the end of a dramatic day in Tokyo that also saw Watanabe's top lieutenant, Takumi Shibata, resign over leaks of insider information to clients of its securities unit in 2010.

Watanabe is the second global bank boss to resign this month - Barclays (BARC.L: Quote) chief Bob Diamond stood down over the Libor rate-rigging scandal on July 3 - as the industry finds itself under huge political and regulatory pressure.

The departure of Watanabe and Shibata, the architects of Nomura's takeover of the Asian and European assets of Lehman Brothers, raises questions about the future of the global expansion strategy they pursued.

Nagai, a three-decade company veteran who took over as head of the Nomura's domestic securities unit in April as part of a management reshuffle, said he would map out a "new global strategy". He said he had no intention of dropping Nomura's ambition of being a global investment bank centered in Asia, but suggested he may pursue further restructuring overseas.

"We will make bold choices of what we will focus on. We will not simply stick to how we did things in the past," he said.

In an update on its own investigation into the scandal, Nomura said there was a "high possibility" that it leaked inside information on additional share offerings to clients beyond the three cases already unearthed by Japanese regulators.

The resignations of Watanabe and Shibata, Nomura's chief operating officer, and their replacement by Nagai and Atsushi Yoshikawa, the head of its U.S. operations, would take effect on August 1, the bank said.   Continued...

Nomura Holdings Inc. incoming Chief Executive Koji Nagai (R) is surrounded by media after a news conference in Tokyo July 26, 2012. REUTERS/Yuriko Nakao