A broker-dealer agreed to pay a civil money penalty of $1.25 million to settle charges that it failed to maintain and enforce policies and procedures to prevent the disclosure of material nonpublic customer order information regarding the repurchase of shares by issuers ("customer buyback order information").
According to the SEC Order, Mizuho Securities USA LLC's ("Mizuho") execution and sales traders disclosed material nonpublic information regarding customer buyback orders to other Mizuho traders and certain customers. The SEC Order states that Mizuho failed to maintain and enforce "effective information barriers" between its equity trading desks, as well as other measures designed to protect confidential customer order information. The SEC found that from approximately December 2012 to December 2014, (i) confidential issuer buyback trade information was given to execution and sales traders almost daily, (ii) the head execution trader at the U.S. Equity Trading Desk had direct access to the International Trading Desk's order management system and (iii) the execution and sales traders disclosed nonpublic customer buyback order information (such as order size, the limit price and key terms) to certain firm customers on several occasions. The Commission determined that Mizuho violated Exchange Act Section 15(g).
Mizuho neither admitted to nor denied the SEC allegations.
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