Reporting error costs Nomura $30,000

Nomura Australia has paid a penalty of $30,000 to the Australian Securities and Investment Commission (ASIC) after an incident that led to a sharp fall in the price of Alumina Limited (AWC) shares.

The business regulator alleged a Nomura trader failed to enter two orders to sell correctly, causing the market price for AWC to plummet from $2.20 to $2.00.

ASIC said the conduct had been inadvertent rather than deliberate or reckless.

“While the relevant orders were entered in error, the trader failed to enter them with appropriate care,” ASIC said.

The Corporations Act says “a market participant must not do anything which results in a market for a product not being both fair and orderly, or fail to do anything where that failure has that effect.”

Nomura self-reported the incident, agreed to the penalty and has put in place systems to prevent a future occurrence.

Nomura made global headlines in October 2008, when it acquired most of Lehman Brothers’ Asian operations together with its European equities and investment banking units. The company is based in Tokyo.


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