TOKYO : Japan's SMBC Nikko Securities reported on Thursday a sharp dive in net profit as revelations of alleged market manipulation led some clients to temporarily suspend businesses with the brokerage house.
Its January-March net profit came in at 1.95 billion yen versus 16.3 billion a year earlier, the unlisted brokerage arm of Sumitomo Mitsui Financial Group Inc said. SMBC Nikko and five former executives have been indicted on market manipulation charges for its purchase of 10 individual stocks on the market, allegedly to push up their prices and ensure block trade deals in them did not fall through.
A company executive told an earnings briefing that the revenue impact from the market manipulation was about 10 billion yen for the year that ended in March, as some institutional investors and companies suspended orders. The company, now making its own investigation, said this month it could not deny faults in its internal management structure and was aware it could not escape its responsibilities.