SEC Charges Mizuho Securities for Failure to Safeguard Customer Information

The Securities and Exchange Commission today charged Mizuho Securities USA LLC for its failure to safeguard information pertaining to stock buybacks by its issuer customers. Mizuho failed to maintain and enforce policies and procedures aimed at preventing the misuse of material nonpublic information, including maintaining effective information barriers between different trading desks and requiring employees to keep client information confidential. Mizuho agreed to settle the charges and will pay a $1.25 million penalty. According to the SEC’s order, during a two-year period, Mizuho traders regularly disclosed material nonpublic customer buyback information to other traders and Mizuho’s hedge fund clients. That information included the identity of the party placing the order, the order size, limit price, and indications that the orders were buyback orders.