Prosecutors in Tokyo on Thursday arrested SMBC Nikko’s vice president and filed criminal indictments against the company and five bankers for allegedly manipulating a market, in a scandal that befell the stock division of Japan’s third-largest brokerage firm.
According to a document issued by the plaintiffs, SMBC Nikko traders filed large buy orders towards the end of the trading day to artificially raise stock prices, a move that authorities claim is market manipulation.
The company and five bankers, including three executives, were charged on suspicion of violating Japan’s Financial Instruments and Stock Exchange Act, according to the document. If convicted, the men could face up to 10 years in prison and fines of more than $ 80,000. SMBC Nikko, as a company, is subject to fines of up to ¥ 700 million ($ 5.7 million).
The media arrests sent Shock waves Through the banking industry and put the spotlight Japanese regulators And corporate governance as Tokyo works to reappear on the global stage as a major financial center.
Four of the five bankers accused in Nico were arrested Earlier in March. People close to the four bankers told the Financial Times that they will now start applying for their guarantee while maintaining their innocence. The FT could not immediately reach the fifth defendant to respond.
SMBC Nikko said in a statement that it treats arrests and indictments “very severely” and admitted that there is a flaw in the internal management system. “We recognize our responsibility as a corporation in this sense,” the company added.
Prosecutors also allege that Nico’s arrested vice president, Toshihiro Sato, was involved in the deals. Sato, 59, was questioned by prosecutors several times voluntarily, local media reported, telling them he had received reports of the transactions but was unaware of any illegality. No indictment was filed against him.
SMBC banker Nikko told the Financial Times that no new messages came from the leadership and the trading floor was a “complete mess” on Thursday. Some of the people, who cared about the viability of the business and their work, shed tears, and others compared the mood there to “mourning.”
Bankers said they think plaintiffs are setting an example for SMBC Nikko to deal with seemingly prevalent market manipulations, speculating that regulators could open investigations into similar deals at other brokers.
Sato, who joined SMBC Nikko in 2019 and oversaw its stock division, worked for a long time in the market division of Sumitomo Mitsui Banking Corp, the second largest lender in Japan.
In addition to the allegations made against the individuals, the plaintiffs also accuse Nico, as a corporate entity, of responsibility for what the regulator sees as illegal trading in shares and operating internal systems that were not sufficient to prevent this.
The four people arrested before Sato include the head of Japanese stock trading, Makoto Yamada, and the head of the American stock division, Trevor Hill.
Hill, along with another senior executive arrested from the UK, Alexander Avciantes, played a key role in making the company a world power with offices in Hong Kong, New York and London.
The two’s relationships, knowledge and experience will not be easily replaced from Nico and outsiders were unreasonable given the investigation, according to company officials.
SMBC Nikko bankers charged with market manipulation by Japan prosecutors Source link SMBC Nikko bankers charged with market manipulation by Japan prosecutors