Japan: Former Nomura Securities Employee and Friend Receive Suspended Sentenced, Fine in Insider Trading Case

On Thursday, the Tokyo District Court on Thursday convicted a former employee of Nomura Securities Co. and a friend of insider stock trading and sentenced them both to 2 1/2-year prison sentences.

The Japan Times reports that the court fined Li Yu, formerly with Nomura, ¥1 million (approximately US$11,000) and fined his codefendant, Su Chunguang, ¥3 million.  In addition, the two were jointly ordered to forfeit ¥6.3 million and Su was ordered to forfeit an additional ¥49 million.

As previously discussed here, Li Yu and Su Chunguang, both Chinese nationals,  pleaded guilty in November to charges of insider stock trading.  The Japan Times reported that Li and Su were charged with violating the Financial Instruments and Exchange Law, which prohibits trading in stocks based on insider information.  Although illegal, insider trading has not been aggressively enforced in Japan.

The prosecution alleged that Li obtained insider information while working for Nomura’s corporate information division, which handles corporate mergers and acquisitions.  Prosecutors alleged that Su traded shares after receiving information obtained by Li, and that the two split the costs and profits linked to the stock trading.

Read the Japan Times article