Nomura fined 1.75m by the FSA for serious mis-marking

NOMURA has been fined &pound;1.75m by the Financial Services Authority for &ldquo;widespread systems and control failings&rdquo; at its international equities division.<br /><br />The problem came to light in June 2008 when a London trader noticed a Hong Kong trader had mis-marked his derivatives book. <br />The Hong Kong trader, who was suspended last year pending an investigation, over-valued instruments from January 2008 to June 2008. This resulted in the position needing an adjustment of &pound;10.8m, then later another &pound;5.5m. <br /><br />FSA enforcement and financial crime director Margaret Cole said: &ldquo;Financial instruments must be valued correctly by traders and a firm&rsquo;s systems and controls must be able to minimise the risk of traders mis-marking their positions.<br /><br />&ldquo;When a firm&rsquo;s systems and controls fall short of required standards, we will not hesitate to take action.&rdquo;<br /> <br />Nomura, which disciplined other staff and whose fine was 30 per cent discounted for its cooperation, said in a statement: &ldquo;Nomura identified the mis-marking in June 2008 and took immediate action. We conducted a full review and kept the regulator fully informed.&rdquo;