Yamakawa Hiroshi, the president of Nomura Securities, woke up early in the morning as usual.
Raising his upper body, Yamakawa reached out beside his bed, removed the cover from a glass of water, and gulped it down to soothe his parched throat.
Glancing at the clock, he saw that it had just passed 6 a.m.
Although he had slept his usual amount, the recent stress weighed heavily on him, making his body feel like lead.
He recalled the report he received yesterday from the CFO—that an additional $1 billion had been paid to the Eldorado Fund under the options contract. Instinctively, he let out a groan.
"Usami... that fool. I don't even know how much we're losing because of him."
A single mistake in one options contract had cost them more than double Nomura Securities' pre-tax operating profit from last year. No wonder he was swearing under his breath.
Because of this, unless they struck it big by the end of the year, Nomura Securities was certain to post a loss for the year.
"We barely fudged the books to get through Q1, but the upcoming Q2 earnings report will be a disaster."
If the news broke that they had suffered a massive $2 billion loss, not only would the stock price crash immediately, but the shareholders' meeting would be a battlefield of criticism and blame. That much was clear.
If that were the end of it, it might have been manageable—but in the worst-case scenario, Yamakawa might not even be able to finish his term and would have to resign in disgrace.
"After all the work it took to reach this position, there's no way I'm letting that happen."
He had dedicated his youth entirely to the company, pushing aside peers and seniors to finally achieve the title of President.
Like his predecessors, his goal was to complete three consecutive terms and then retire into a comfortable advisory role.
But now, with an unexpected crisis threatening everything, rage consumed him.
Yamakawa bit his lower lip and muttered grimly,
"First, I have to cover up the losses, no matter what it takes."
Despite his boiling anger, he had deliberately refrained from blaming Usami any further. He even paid out Usami's full severance, granting him a relatively clean exit.
If Usami, out of spite, revealed the company's massive losses, it would only hurt Yamakawa.
Sighing deeply, Yamakawa swung his legs off the bed and pulled a cigarette from a silver case on the nightstand.
He lit it with a click of his lighter.
Normally, his wife would nag him not to smoke in the bedroom because of the lingering smell, but right now he didn't have the luxury to care.
As the nicotine spread through his body with a deep inhale, he felt a bit of his anxiety ease.
"Phew."
After a few silent puffs, Yamakawa spoke, as if making a firm decision.
"Looks like I'll have to do a tobashi after all."
Tobashi (飛ばし) literally means "to blow away" and is slang in Japan's financial world. It refers to hiding losses by shifting them to another company's accounts across financial periods—essentially a type of accounting fraud.
Despite the illegality, such practices were openly carried out in Japan's corporate world, so Yamakawa felt no guilt.
"The amount's a bit large, but if I spread the losses over three or four years, I can make them disappear without anyone noticing."
Even for Japan's leading Nomura Securities, it wouldn't be easy. Yet Yamakawa kept murmuring, as if hypnotizing himself.
"This is the only way left. I can do it."
Repeating it several times, Yamakawa stubbed out his half-smoked cigarette in the ashtray and stood up from the bed.
Throwing a light cardigan over his pajamas, he stepped out of the bedroom, where his wife peeked out from the kitchen.
"You're up early."
"Yeah. What's for breakfast?"
"Grilled mackerel, your favorite," his wife answered.
"No natto?"
"We have that too."
"Then take it out. I'll eat them together."
As Yamakawa heard his wife instructing the housekeeper preparing breakfast, he stepped outside into the garden.
Spring had fully arrived, and even in light clothing, it felt a little warm.
Crossing the lawn, Yamakawa picked up the morning newspaper lying under the iron gate.
"Let's see..."
Unfolding the paper, Yamakawa's eyes widened in shock at the bold headline sprawled across the front page.
Massive Options Losses Totaling Billions of Dollars at Japan's Big Four Securities Firms, Including Nomura!
It has been confirmed through investigation that the Big Four—Nomura, Nikko, Daiwa, and Yamaichi Securities—suffered enormous losses from option contracts with foreign funds.
Due to these losses, it is expected that all four firms will inevitably post deficits this year...
Seeing the very matter he had tried so desperately to conceal plastered on the front page, Yamakawa froze in place.
"What the hell..."
His face flushed red, then pale with a mix of shock and fury. Clutching the newspaper tightly in one hand, he stormed back into the house.
"Breakfast is ready. Come eat," his wife called out cheerfully.
"Later," he snapped back.
Ignoring her concerned gaze, Yamakawa, his face stiff with rage, stormed past her and slammed the study door shut.
His wife, sensing that something serious must have happened, stared worriedly at the closed door and murmured,
"Did something happen at the company...?"
Barricading himself inside the study, Yamakawa sat heavily on the leather sofa and immediately called Managing Director Takenaka.
As the dial tone echoed in his ear, he skimmed through the article in the newspaper again, his brows furrowing deeply.
[Yes, this is Takenaka.]
The moment the other party answered, Yamakawa slammed the newspaper down on the table and barked,
"It's me."
[Ah, President.]
"I just saw the article in today's Nihon Keizai Shimbun about the options contracts! What the hell is going on!"
His voice was seething with rage, and Takenaka replied with obvious discomfort,
[I was just about to call you, but it seems you saw it first.]
"You knew and still kept quiet?!"
Takenaka hurried to explain,
[I only found out just moments ago when PR contacted me.]
Yamakawa clenched the receiver tightly, roaring in fury,
"When an article like this comes out, PR should have dealt with it beforehand! What the hell were they doing!"
[Apparently, when they checked the first edition yesterday, there was no such article.]
Newspapers would distribute an early edition—the first print—to subway stations, bus stops, and other kiosks the evening before the official release. These first editions, called "ga-han" (early editions), allowed time for companies and government offices to negotiate with newspapers to modify or remove unfavorable articles before the final versions were printed and delivered to homes the next morning.
Naturally, Nomura Securities had employees assigned to buy every early edition daily to check for any problematic articles.
The fact that they still missed this one infuriated Yamakawa even more.
"So you're telling me Nihon Keizai Shimbun deliberately set us up?!"
Takenaka, sweating profusely, replied,
[No, sir. From what we found out, the article was added after the early edition had already gone to print.]
"Goddammit!"
Yamakawa slammed his palm on the table in fury.
"Even so, there should've been a system to get immediate alerts about articles like this!"
Even if it was difficult to pull an article after printing, it was clearly a failure that they hadn't at least bought themselves time to prepare countermeasures. Takenaka had no excuse.
[I sincerely apologize.]
"You think a sorry's going to fix this!"
[...I am truly sorry.]
Clicking his tongue in clear displeasure, Yamakawa shouted again, his voice dripping with irritation,
"I'm coming to the office right now. Call an emergency meeting immediately!"
[U-understood!]
Slamming the receiver down with such force it seemed it might break, Yamakawa looked back at the article sprawled across the table and clutched his head in despair.
"This is driving me insane."
***
Tokyo, Nihonbashi.
From early morning, the securities firm's trading floor was packed with more than forty investors.
Everyone had rushed over after being shocked by the morning paper's report about the massive options contract losses suffered by Japan's Big Four securities companies.
"What the hell happened?"
"Seriously. Not just one, but all four top securities firms blowing away billions through options? Who could've even imagined it?"
Amid the tense, anxious atmosphere, a middle-aged man in a fedora and another man wearing a floral print shirt stood side-by-side in front of the giant price board.
The man in the fedora, holding a financial newspaper in one hand, muttered as if he had finally put the pieces together,
"No wonder securities stocks suddenly plummeted so badly. Now it all makes sense."
"Exactly. Losses amounting to hundreds of billions of yen… They're big companies, so they won't go bankrupt from this alone, but the damage must be enormous, right?"
"Of course. Last year, Nomura Securities—the industry leader—had a pre-tax profit of 124.2 billion yen. Nikko, Daiwa, and Yamaichi earned around 30 to 40 billion yen each. If what the newspaper says is true, they've lost about two years' worth of profits in a single shot. This is no small disaster."
The middle-aged man spoke passionately, spitting a little as he emphasized his point.
The man in the floral shirt instinctively took a small step back, then shook his head in disbelief and asked,
"But seriously, how did they lose that much money?"
"Well…"
The fedora man lowered his voice slightly, glancing around as if wary of being overheard.
"Rumor has it, they made CDS option contracts with the Eldorado Fund, betting on the Thai and Indonesian stock indices."
The floral shirt man widened his eyes in shock.
"Wait… Eldorado Fund? Isn't that the one that caused a massive scandal not long ago with those knock-in, knock-out options?"
"That's right. Even after seeing major companies like Nissan get badly burned, they still went ahead and lost a fortune on options. Absolutely pathetic."
The middle-aged man clicked his tongue in frustration, tapping his palm with the rolled-up financial newspaper.
"At least I'm so grateful I cut my losses and sold off all my Nomura shares on the first day the market started to fall."
He wore an expression like he had narrowly escaped death.
The man in the floral shirt, recalling how the fedora man had dashed to sell like his feet were on fire, chuckled a little and asked,
"When the market opens, all four of their stocks are going to crash, right?"
"Of course. After a scandal this big, how could they possibly hold up?"
The floral shirt man nodded in agreement.
Both of them stared anxiously at the giant price board, worried that the Nikkei index—which was already in a slump—would plunge even deeper into the abyss because of this disaster.
As everyone waited in nervous silence, the market finally opened, and the frozen numbers on the board began to move.
Sure enough, the board was instantly flooded with green — the color indicating falling prices.
The crowd of investors who had gathered stared at the board in stunned silence.
"Ah…"
"Unbelievable…"
Among them, those who had bought securities stocks recently, hoping the prices had bottomed out after a few days of decline, were especially devastated. Watching the stock prices plunge like a waterfall, some even collapsed onto the floor in shock.