Nomura, 2 Execs Indicted in Payoff Scandal

Prosecutors charged Nomura Securities Co., Japan’s largest brokerage, and two former top executives with illegally compensating a gangster for $430,000 in trading losses. The charges were the first in the scandal, which has widened to include the rest of Japan’s Big Four brokerages and Dai-Ichi Kangyo Bank Ltd., the nation’s third-largest bank. Ryuichi Koike, 54, a reputed corporate blackmailer, borrowed $260 million from the bank, part of which he used to buy 300,000 shares in Nomura and the other three brokerages, according to the Ministry of Finance. Then he used his position as a large shareholder to extort hush money from Nomura, prosecutors allege. More charges are likely, since police arrested former Nomura President Hideo Sakamaki, 61, for questioning last week. Prosecutors also charged Shimpei Matsuki and Nobutaka Fujikura, two of three executives the securities commission asked prosecutors to charge. Both are managing directors and were charged with one count of illegally compensating a client and another count of passing the brokerage’s own profits to another person.