The latest compliance issues in wealth management across North America.

Nomura
The US subsidiaries of Japanese investment firm Nomura have agreed to pay a settlement to the US authorities. This follows a US Department of Justice investigation into the handling of residential mortgage-backed securities securitized by the US subsidiaries prior to 2009. The US subsidiaries will pay $480 million to resolve the matter.

The US subsidiaries include Nomura Holding America, Nomura America Mortgage Finance, Nomura Asset Acceptance Corporation, Nomura Asset Capital Corporation, Nomura Credit & Capital, Nomura Home Equity Loan and Nomura Securities International.

The company estimates that the settlement will incur a negative impact of around approximately 20 billion Japanese yen ($178 million) on its Q2 results. The company will recognize the impact in the financial statement for that period.

The firm cooperated with the DOJ and the US Attorney’s Office for the Eastern District of New York, which conducted the investigation under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. The US subsidiaries do not admit any facts, liability or wrongdoing in connection with the settlement and they dispute the allegations made by the DOJ.

SEC
The Securities and Exchange Commission has made charges against Bruce Fixelle, an investment advisor with a history of violating the securities laws, for defrauding his close friends and community members.  

According to the SEC’s complaint filed, from at least 2014 through at least 2017, Fixelle solicited investments from close friends he met through a local community organization, telling them that he was going to invest their money in initial and secondary offerings, which he would then sell before the end of the trading day. 

Fixelle described his trading strategy as safe and successful. In reality, rather than investing these funds, he allegedly used investor money to pay mounting personal debt and personal expenses.  

In 2014, Fixelle and a company he controlled, Genesis Advisory Services, were charged by the Commission with violations of Rule 105 of Regulation M. Among other sanctions, they agreed to pay disgorgement, prejudgment interest, and civil penalties of over $1.5 million.  

The SEC’s complaint, filed in federal district court in New Jersey, charges Fixelle, Genesis, and another company he controlled, Aurora Capital Management, with violating the antifraud provisions of the federal securities laws.