Japan's Nomura to investigate Archegos-related loss -sources

Japanese regulators are heightening scrutiny of high-risk trades by financial firms in the wake of Archegos. The securities unit of Japan's Mitsubishi UFJ Financial Group (MUFG) also said last month its loss related to an unnamed U.S. client was estimated at around $270 million.

Japan's Nomura has set up an internal team to investigate a possible $2 billion loss relating to Archegos Capital Management, two people familiar with the matter said. Archegos, a New York investment fund run by ex-Tiger Asia manager Bill Hwang, collapsed last month when its debt-laden bets on media companies including ViacomCBS unraveled.

Nomura, Credit Suisse and other global banks, which acted as brokers for Archegos, scrambled to sell the shares they held as collateral and unwind the trades. The loss incurred by Nomura has thrown Japan's biggest brokerage and investment bank's risk management into question and attracted scrutiny from the country's regulators.

Nomura plans to disclose details related to the loss, which it disclosed in March, later this month, possibly on April 27, one of the sources told Reuters. The bank has set up the team to look into the bank's risk management practices, said the sources, who declined to be named as they were not authorized to speak to the media.

A spokesman for Nomura declined to comment. Japanese regulators are heightening scrutiny of high-risk trades by financial firms in the wake of Archegos.

The securities unit of Japan's Mitsubishi UFJ Financial Group (MUFG) also said last month its loss related to an unnamed U.S. client was estimated at around $270 million. A source said the client was Archegos.

 

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