US authorities on Tuesday brought charges against three former Nomura Securities traders for alleged malpractices related to residential mortgage-backed securities (RMBS).
The Securities and Exchange Commission (SEC) and the US Attorney’s office in Connecticut allege that the traders lied to bank customers about the prices of RMBS to make money, the Wall Street Journal reported.
The traders, who no longer work at Nomura, are said to have cheated customers by artificially inflating and deflating the prices of RMBS and giving a false picture of bids and offers.
According to the SEC, the traders – Ross Shapiro, Michael Gramins and Tyler Peters – generated about US$7 million in additional revenue for Nomura through the scheme, which also involved some junior colleagues.
Regulators say the trio received multi-million dollar pay packages, based in part on revenue generation, during the period of misconduct.
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