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Bank agrees $480m penalty over 'dogs***' loans

Nomura has agreed to pay $480m (£364m) to settle US claims relating to the mis-selling of mortgage-backed securities ahead of the financial crisis.

The Department of Justice (DOJ) said the deal with the Japanese bank related to allegations Nomura misled investors between 2006 and 2007, resulting in them suffering “significant losses”.

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The bank disputed the case and is not required to acknowledge any guilt under the settlement.

The DOJ argued the bank’s assertion that it’s due diligence procedures were “extensive” and “disciplined” was false.

It highlighted evidence collated in the case which included the bank securitising loans as favours to loan originators – including bundles openly described to Nomura as “dogs***”.

Officials also claimed to have uncovered an email from a member of the Nomura team stating that “advertising will be a great career when all these loans finally blow up… (I will be selling vacuum cleaners door to door when the market goes by the way).”

The DOJ deal is the latest settlement with a major world bank over the mis-selling scandal.

RBS agreed a £3.6m payout earlier this year – by far the largest sum for a UK-based financial institution.


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Just months earlier, Barclays settled for £1.4bn while HSBC was handed a £582m penalty a week ago.

Richard P Donoghue, United States attorney for the eastern district of New York, said of the action against the Japanese bank: “This settlement holds Nomura accountable for its fraudulent conduct in connection with its residential mortgage-backed securities offerings, which caused substantial harm to investors and contributed to the financial crisis of 2008.

“The Department of Justice, this office and our partners will continue to aggressively pursue wrongdoing in our financial markets, including, as appropriate, financial crisis-era misconduct.”

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