The US Securities and Exchange Commission (SEC) has charged two former head traders at Nomura Securities International of lying to customers to inflate the profits of the firm’s commercial mortgage-backed securities (CMBS) desk in New York.

The regulator accused the traders James Im and Kee Chan of misrepresenting price information to customers looking to buy and sell CMBS on the secondary market.

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“In certain instances, Im and Chan allegedly pretended they were still negotiating bond purchases with a third-party seller at higher prices when Nomura had already acquired the bonds at a lower price,” the watchdog alleged.

The pair generated over $750,000 in extra profits for the CMBS desk through fraud and secured substantial bonuses based on the desk’s performance, SEC said.

Chan agreed to settle the allegations by paying a $150,000 penalty, $51,965 in disgorgement, and $11,758 in interest. The settlement is pending court approval.

Chan also agreed to be barred from the securities industry with a provision to reapply after three years, though he neither admitted nor denied the accusations. The case against Im is still on.

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SEC director of New York regional office Andrew Calamari said: “As alleged in our complaints, Im and Chan operated under cover of an opaque CMBS secondary market to gain illegal trading profits and potentially larger bonuses by lying to firms on the other side of their trades about the prices at which they were buying and selling securities.”