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    8604   JP3762600009

NOMURA HOLDINGS, INC.

(8604)
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Delayed Japan Exchange  -  02:00 2022-08-18 am EDT
511.90 JPY   -0.83%
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Former Archegos employee sues for millions in lost pay, cites 'toxic' culture

07/05/2022 | 01:20pm EDT
FILE PHOTO: 888 7th Ave, a building that reportedly houses Archegos Capital is pictured in New York City

NEW YORK (Reuters) - A former managing director at Archegos Capital Management LP has sued the private investment firm and its indicted founder Bill Hwang, claiming a loss of tens of millions of dollars when the firm collapsed, causing huge losses for banks.

In a complaint filed on Tuesday in Manhattan federal court, Brendan Sullivan said he was defrauded out of as much as $50 million after Archegos required him and colleagues to put at least 25% of their bonuses in its deferred compensation plan.

Sullivan said the plan lost $500 million when the firm collapsed in March 2021, despite Archegos' promise that money would be safely invested only in highly liquid stocks.

He said participation was effectively coerced by requiring employees to decide how much to defer before Hwang awarded bonuses. He said Hwang presided over a "toxic culture" and demanded unswerving loyalty while running Archegos as a "personal fiefdom."

"The message was crystal clear. No contribution. No bonus," said Sullivan, a specialist in technology and media companies.

Lawrence Lustberg, a lawyer for Hwang, declined to comment, Lawyers for Archegos did not immediately respond to requests for comment.

Archegos once had $36 billion of assets. It imploded when it was caught short after making huge bets on stocks including ViacomCBS through securities known as total return swaps.

The resulting fire sale in stocks caused about $10 billion of losses for banks, primarily Credit Suisse Group AG and Nomura Holdings Inc.

Sullivan said Archegos threatened employees who thought of quitting and claiming their deferred pay.

By then, he said Archegos had devolved into a "personality cult" where Hwang cared more about "employee submission and adulation than performance and talent" and urged employees to devote more time to their faith and attend scripture readings.

At mandatory company retreats, "those who declared they were grateful for God, Hwang, and Archegos received high praise and manufactured applause," while others were deemed "untrustworthy" and personally and professionally deficient, Sullivan said.

Hwang and former Archegos chief financial officer Patrick Halligan have pleaded not guilty to criminal fraud charges over Archegos' collapse.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)

By Jonathan Stempel


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
CREDIT SUISSE GROUP AG 0.81% 5.25 Delayed Quote.-41.30%
NOMURA CO., LTD. 0.52% 969 Delayed Quote.1.15%
NOMURA CORPORATION 0.30% 1003 Delayed Quote.14.50%
NOMURA HOLDINGS, INC. -0.83% 511.9 Delayed Quote.2.89%
PARAMOUNT GLOBAL -1.81% 25.805 Delayed Quote.-12.86%
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Analyst Recommendations on NOMURA HOLDINGS, INC.
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Financials
Sales 2023 1 349 B 9 966 M 9 966 M
Net income 2023 164 B 1 208 M 1 208 M
Net Debt 2023 - - -
P/E ratio 2023 9,64x
Yield 2023 3,86%
Capitalization 1 536 B 11 372 M 11 350 M
Capi. / Sales 2023 1,14x
Capi. / Sales 2024 1,12x
Nbr of Employees 26 973
Free-Float 90,7%
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Technical analysis trends NOMURA HOLDINGS, INC.
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Mean consensus HOLD
Number of Analysts 10
Last Close Price 511,90 JPY
Average target price 534,60 JPY
Spread / Average Target 4,43%
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Managers and Directors
Kentaro Okuda President, Group CEO & Director
Takumi Kitamura CFO, Chief Administration Officer & Head-IR
Koji Nagai Executive Officer
Jun Yoshimura Executive Officer & Head-Group IT
Yoshifumi Kishida Executive Officer & Head-Group Legal Affairs
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