Japan's largest brokerage, Nomura Holdings (NMR, Financial), continues to face challenges in the corporate bond market following a market manipulation scandal. Despite some clients resuming business, Nomura's ranking among Japanese corporate bond underwriters has dropped to sixth, with a market share of 1.9%, down from third place and 19% market share in 2023.
In 2021, a Nomura trader was involved in a "layering" scheme to manipulate Japanese government bond futures, leading to a recommended administrative fine of 21.76 million yen ($150,900). Although the fraudulent profit was only about $10,000, Nomura suffered significant reputational damage, losing major clients and its primary dealer privilege in government bond auctions.
In contrast, Mitsubishi UFJ Morgan Stanley Securities faced a similar scandal in 2018 but experienced a smaller market share decline. Nomura has since taken measures to restore trust, including executive pay cuts and strengthening compliance, resulting in resumed business with major banks and insurers.
