A hellish year for Nomura's CEO: One employee is accused of manipulating the bond market – and another of attempted murder of a customer

On Thursday, the company's CEO, Kentaro Okuda, along with a handful of other executives, announced they would cut their own pay following revelations that a Nomura employee had manipulated the Japanese bond market.

Okuda has agreed to pay back 20% of his salary for two months, along with the executive vice president of global markets, the vice president and many other executives – although some are only paying back 10%.

In addition, just an hour after the announcement, it was revealed that a former Nomura employee had been arrested on suspicion of robbery, arson and attempted murder.

Kyodo news, A leading Japanese media reported that the 29-year-old man was working at Nomura when he allegedly committed the crimes. The man reportedly drugged a Nomura customer and his partner before stealing the equivalent of $170,000 from their home and setting it on fire. (The couple, in their 80s, are said to have fled.)

A Nomura representative declined Fortune's Please comment, but said a spokesman Bloomberg that it is “extremely regrettable that a former employee of ours was arrested.”

The scene of the (market manipulation) crime

Japan's Financial Services Agency (FSA) uncovered bond market manipulation in September. It was reported that over the course of one day in March 2021, a Nomura employee placed “misleading orders” in the government bond futures market – and subsequently made profits without any intention of buying or selling the orders he placed .

The move, according to the Japanese FSA, is called “stratification.”

Nomura's summary of the event states: “An employee engaged in proprietary trading placed multiple sell orders on the Osaka Exchange for futures on Japanese government bonds (JGBs) at the best offer or lower prices in order to overlay the ask order book and at the same time “buy the same JGB futures at a lower price and place multiple buy orders at the best bid or at lower prices to overlay the bid order book while simultaneously selling the same JGB futures at a higher price.”

“The employee's series of derivatives transactions and orders led the market to believe that futures trading was flourishing, which may have led to fluctuations in futures prices on the Osaka Stock Exchange,” the company said.

sources told Bloomberg that the employee who placed the orders has since left Nomura. Many Nomura customers and institutional investors also left, the sources added.

Bosses pay

In a statement on Thursday, Nomura took responsibility for the situation. “We apologize to our customers and all other affected parties for the problems this has caused,” the company wrote.

“We take this matter very seriously. We will continue to improve our compliance framework and internal controls to prevent similar incidents in the future and regain trust.”

In an accompanying statement, also released Thursday, the company unveiled a list of new rules designed to ensure similar issues don't arise again. “By fully implementing these measures, we will further improve our compliance framework and internal controls to prevent similar incidents and regain trust,” it said.

Meanwhile, the bosses pay. Okuda earned an estimated $3.2 million per year this year BloombergThat means his 20% return will set him back about $640,000.

Still, returns remained strong

The one-two punch of terrible press comes at a time when Nomura was otherwise doing quite well. Profit more than doubled, according to second-quarter results released Friday. In fact, the company reported its highest profit in four years and its sixth consecutive quarter of growth.

Okuda is probably relieved by the growth. Not only was his own salary cut, but Nomura also just had to pay a $144,000 fine as a result of the manipulation Reuters it had “temporarily lost its status as the main dealer of government bonds”.

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