Ex-Nomura Trader Says Bank Crucified Him Over Client Demise

  • Giovanni Lombardo suing Nomura in London for unfair dismissal
  • Bank says his inaction helped cause $40 million Invexstar loss

Giovanni Lombardo, a former bond trader at Nomura Holdings Inc., leaves an employment tribunal in London, U.K., on Tuesday, May 17, 2016.

Photographer: Simon Dawson/Bloomberg

Bond salesman Giovanni Lombardo said his bosses at Nomura Holdings Inc. made him a scapegoat as he pleaded with a client whose failed trades eventually cost the bank $40 million.

"Give me a call with a yes or no because here they crucify me," Lombardo said to his client Alberto Statti, the manager and sole employee of an obscure finance trading firm called Invexstar Capital Management Ltd. that was trading bonds with Tokyo-based Nomura.

The conversation was disclosed Wednesday during a London lawsuit filed by Lombardo, who is suing Nomura over his firing. The 2015 collapse of Invexstar after about a year of trading inflicted losses of 120 million pounds ($175 million) on some of the world’s biggest banks. Lombardo, who claims he’s been blamed for mistakes made by others at the bank, can no longer find work in finance and now makes money driving tourists around Sicily, he said.

Statti had accumulated failed trades worth $666 million when Lombardo contacted him under pressure from his Nomura bosses. Statti said he “was waiting for payment internally, indicating that we were both stuck in the middle,” Lombardo said in his statement.

‘A Mess’

"It is a mess, I know, give me half an hour," Statti said, according to the statement.

Payment never came and Nomura fired Lombardo for failing to escalate concerns about Invexstar as early as May 8, four days before his call with Statti, when the company had accrued failed trades worth £333 million, Mike Ward, Nomura’s head of equity sales, said in a statement submitted last week. Senior management became aware of the problem on the evening of May 12, 2015, "when failed trades in U.S. treasuries caused a spike in reported unsecured funding for the U.S. region,” Ward said.

Nomura shouldn’t have taken Invexstar on as a client, a process known as “on-boarding,” Lombardo said. The company was given electronic trading access, extended trading and credit limits when it it had almost no assets, while Statti wasn’t registered with the Financial Conduct Authority, he said.

Previous Collapses

Statti had run two trading firms before setting up Invexstar, Bloomberg reported in January. One, BLF Global Asset Management Ltd., collapsed in 2013 owing about 12 million pounds to creditors including JPMorgan Chase & Co. and Citigroup Inc. while the other, Bi-Elle Fund & Asset Management U.K. Ltd., ceased operations in 2008 with losses of 54 million pounds, U.K. Companies House filings show.

“I wasn’t made aware of Alberto Statti’s prior history by anyone,” Lombardo said in his statement, referring to Statti’s time at BLF. As a result, he “was handed a client to manage that I was led to believe was sound and had passed all required on-boarding checks,” he said.

Nomura “should have known that Mr. Statti and Invexstar came with potential risks but failed to see these obvious red flags," Lombardo said. "It has never been part of the sales person’s role to systematically monitor trends and patterns in each client’s trading history."

Lombardo said the firing has had a "catastrophic" effect on his life.

Lombardo, who was paid 310,000 pounds by Nomura in 2014, has relocated to Sicily with his family because he can no longer work in the financial services industry in the U.K. or Italy.

He set up a travel business in January 2016 called Free Wheeling Tour organizing trips and car rides to and from the airport. He hopes to earn 1,500 euros ($1,690) a month once it is established, according to his statement.

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