Nomura Holdings CEO Kenichi Watanabe and his top lieutenant, Takumi Shibata, will resign to take responsibility for leaks of insider information to the clients of its brokerage unit, people with knowledge of the management shake-up said.
The resignation by Watanabe and Shibata, Nomura’s chief operating officer, were approved at a board meeting on Thursday, the sources said.
The management shake-up comes a month after the investment bank cut pay for both of its top executives in response to the third insider trading scandal since Watanabe took the helm four years ago. Nomura declined comment.
The resignation of Watanabe, 59, had been expected by many inside Nomura since signs emerged this spring that the bank’s leadership was at loggerheads with Japan’s financial regulators, who accused Nomura of being slow to respond to an ongoing investigation into insider trading practices that had grown rampant in the Tokyo market.
But the departure of Shibata too throws open the succession to the CEO post. Possible successors to Watanabe include Koji Nagai, the head of Nomura’s securities unit, and Atsushi Yoshikawa, who heads the investment bank’s U.S. operations.
Together Watanabe and Shibata had overseen Nomura’s troubled 2008 attempt to absorb the Asian and European assets of Lehman brothers and their resignations appeared to mark the end of an era marked by ambitious plans for global expansion at Japan’s top brokerage.
Nomura, Japan’s largest brokerage, is awaiting possible sanctions from Japan’s Financial Services Agency but the scandal has already cost it clients.
Shares of Nomura have almost halved in value since the first insider trading case emerged in March.