19th July, 2012
To whom it may concern
Mizuho Securities Co., Ltd.
Mizuho Securities USA Inc. ("MSUSA"), the U.S. broker-dealer
subsidiary of Mizuho Securities Co., Ltd ("MHSC"), has
entered into a Settlement Agreement with the U.S. Securities
and Exchange Commission ("SEC") in relation to a
collateralized debt obligation ("CDO") which was structured
and marketed by a unit within MSUSA five years ago. MSUSA and
the SEC filed the settlement document with the U.S. federal
district court on July 18 (NY time), and the settlement will
be effective upon court approval.
The SEC's investigation in relation to a CDO called Delphinus
2007-1 focused on whether certain former employees of MSUSA
provided inaccurate information to a rating agency, Standard
& Poor's. MSUSA cooperated fully throughout this process and
now has agreed to the settlement to avoid protracted
litigation and distraction.
Under the terms of the settlement, MSUSA was not charged with
acting with fraudulent intent or engaging in intentional
misconduct and the firm did not admit wrongdoing. Settlement
payment would amount to $127.5 million. MHSC reserved for
most of the settlement amount in its consolidated account in
the fiscal year ended March 31, 2012, and thus the payment
will not have a material adverse effect on MHSC's
consolidated financial statements for the fiscal year ending
March 31, 2013.
MSUSA terminated its CDO structuring unit in 2007, and the
firm is no longer engaged in the CDO
business. MSUSA is not under investigation by the SEC for any
other transaction.
MHSC and its affiliates (domestic and overseas) are committed
to conducting their businesses in strict compliance with all
applicable laws and regulations.
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