BNP Paribas Said to Weigh Management Changes, Pay Cuts in Japan

Oct. 23 (Bloomberg) -- BNP Paribas SA, France’s biggest bank, is considering management changes and salary cuts at its Japan unit after regulators accused it of breaching Japanese securities rules, two people with knowledge of the matter said.

BNP Paribas Securities (Japan) Ltd. will announce disciplinary measures as early as today, one of the people said, declining to be identified. Yusuke Yasuda, head of the firm’s Japanese unit, may resign, the people said.

Japan’s Securities and Exchange Surveillance Commission last week told the Financial Services Agency to penalize BNP Paribas. The bank made mistakes and omissions in documentation it was told to file during an inspection of its internal controls by the agency, the SESC said.

Regulators in November last year ordered BNP Paribas to improve compliance after selling shares of real-estate developer Urban Corp. while aware of a swap agreement that wasn’t public.

BNP Paribas may be informed about what penalty the FSA will impose as early as today, the people said. After that, the company will announce its own disciplinary actions, one of the people said.

The SESC also said buy orders placed by a BNP trader in Tokyo in November last year breached securities rules. The orders for the undisclosed stock constituted artificial market making, the agency said.

An FSA spokesman, who declined to be identified, said he had no comment. BNP Paribas’ Tokyo-based spokesman Daniel Boyd declined to comment. Yasuda didn’t respond to an e-mail seeking comment, and an official who answered the phone at the company’s Tokyo office said he’s out today.

BNP Paribas booked a 1.2 billion yen ($13 million) profit from transactions related to Urban, an outside panel appointed by the French bank to investigate the matter said in November. Urban filed for bankruptcy protection in August 2008.

Yasuda apologized for BNP Paribas’ actions at a press briefing in Tokyo on Nov. 11 last year after the outside panel appointed by the bank released its findings in a 70-page report.

Japan’s SESC is responsible for surveillance of financial companies while the FSA has the power to inspect and penalize.