Nomura has 27.5 bn yen exposure in Madoff fraud

Japanese financial services major Nomura today said the company has an exposure of about 27.5 billion yen ($303 million) in Wall Street trader Bernard L Madoff's alleged $50 billion fraud case.

"The company expects its exposure to Bernard Madoff to be limited to about 27.5 billion yen. We regard this as non-material considering our capital base," Nomura said in a statement.

Shares of Nomura today surged 0.60 per cent to 670 yen on Tokyo Stock Exchange as the company said the exposure is non-material considering the capital base of the financial major.

Last week, Madoff had told senior employees, including his sons, that his investment management firm had lost $50 billion over a number of years.

 

Hundreds of clients, including top industry leaders, could have lost money in the 'Ponzi scheme' engineered by Madoff.

A Ponzi scheme is a type of securities fraud where the promoter makes some sort of false or misleading statement about an investment (often including a guaranteed high rate of return) and pays off older investors with newer investor's monies.

Some of the other major victims of the Bernard Madoff's fraud case include global banking major HSBC, Frances BNP Paribas, Spains Banco Santander, Royal Bank of Scotland and Man Group.

Last Thursday, Madoff, founder of Bernard Madoff Investment Securities and a former chairman of the Nasdaq stock market, was released on a $10 million bond.