SFC bans ex Nomura trader


15 October, AtoZForex.com, Lagos – Activities of rogue traders have been a concern to major banks over time. In a recent case of indiscriminate trader dealings, the Securities and Futures Commission (SFC) of Hong Kong has banned Mr. Masashi Yonezawa for 30 months. Basically, an ex trader at Nomura International (Hong Kong) Limited.

Another London whale?

The ban is a result of a discovery by the SFC over a gross misconduct by Yonezawa, a trader on Nomura Hong Kong’s Delta One trading desk. The bank discovered that Mr Yonezawa had incurred a US$3.3 million trading loss on 23 May 2013. In the probe, the regulators found that he had operated deceptively, leading to a breach of Nomura’s risk management system on several occasions.

In more detail, Mr Yonezawa was found to have breached the risk management rules on three separate days between March and May 2013, concealing the real risk exposure of his trades. Further-more, he was discovered to have made misrepresentations to his supervisors and the management of Nomura Hong Kong, when explaining the trading losses resulting from his trades to them.

Therefore, his activities led to an inaccurate appraisal of risk exposure and prevented Nomura Hong Kong from effectively monitoring the trading activities of its Delta One trading desk. Although the losses are nothing close to the London whale case of JP Morgan back in 2012, it still rightly treated as an intolerable breach of risk management.

Masashi Yonezawa

Mr Masashi Yonezawa operated as a trader for Nomura International (Hong Kong). He was licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities and was accredited with Nomura Hong Kong between 31 December 2012 and 6 June 2013.

Although, he has no longer the due authorization as a dealer from the SFC, his operations in Nomura Hong Kong stemmed from his secondment from Nomura Securities Co., Ltd in Japan.

30 months ban

This conduct informed the consequent 30 month ban from re-entering the industry as the SFC bans ex Nomura trader. Nomura International (Hong Kong) Limited (Nomura Hong Kong) was also fined a total of HK$4.5 million for failing to report significant misconduct by Mr. Yonezawa in a timely manner.

In deciding the disciplinary action, the SFC considered all relevant circumstances, including the fact that Yonezawa’s conduct was deliberate and dishonest, and his remorsefulness for the misconduct.

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