Japan's securities watchdog has conducted a probe at the headquarters of MUFG Bank, one of the country's megabanks, over an employee's alleged involvement in insider trading, sources familiar with the matter said Tuesday.
The employee allegedly gave a family member information about a client's prospective tender offer before the bid became public.
The relative netted several million yen from trading stock based on the information, according to the sources.
"We have indeed been inspected, but we decline to comment further due to the ongoing investigation. We will fully cooperate with authorities on this matter," the main banking unit of Mitsubishi UFJ Financial Group Inc. said in a statement.
The Securities and Exchange Surveillance Commission suspects the employee on multiple occasions divulged information about the prospective takeover bid by the bank's client, a listed company.
The stock prices of companies involved rose after the takeover plan was announced, the sources said.
The employee was quoted by the sources as telling the watchdog, "I did not disclose the information to benefit my relative."
The SESC also probed Mitsubishi UFJ Morgan Stanley Securities Co., since he worked at the financial group's brokerage unit on a temporary assignment from the bank, the sources said.
The latest investigation comes as Japan's Financial Services Agency ordered last month the bank, the brokerage, and another group securities firm to improve their operations after they were found to have shared undisclosed information about customer businesses among themselves without permission.
Japan's Financial Instruments and Exchange Act prohibits insider trading in which people who work at listed firms or their related parties use or divulge to others undisclosed information obtained through business activities that can potentially benefit them or prevent them from incurring losses.
The law also forbids such people from recommending stocks to others based on nonpublic information.
© KYODO
12 Comments
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TokyoOldMan
The key thing, is not to get caught.
kurisupisu
“The law forbids”
…blah blah blah!
Who will get prison time for this?
Nobody!
Japan’s laws apply to the poor, it’s obvious!
oyatoi
The song remains the same. Rake offs, insider trading, and all manner of financial shenanigans are par for the course here. Whatever punishments are meted out will be purely cosmetic and largely ineffectual. Despite all the pious blather and promises of remedial action to prevent a recurrence, we know better. Soon enough, the same JT bat channel will be regaling us with news of yet another case, complete with stock photos of corporate clowns inclining to the requisite degree and mouthing the same tired cliches about how regrettable it all is and making promises they’re not capable of delivering, not by a long shot. Gotta preserve that Wa.
WoodyLee
This is not MUFJ first.
TokyoOldMan
@WoodyLee, it does involve MUFJ :
So don’t blame it on the Foreign Company MS ….
3RENSHO
oyatoi - "The song remains the same"...A brilliant piece of writing!
caroti
More corporate corruption in Japan. Is there any sector or business in Japan that is not corrupt?
wallace
It is not "corporate corruption". It is a MUFJ employee.
Shadows of the Rising Sun
You have highlighted a common misunderstanding of what corporate corruption is so allow me to clarify:
Corporate corruption generally involves unethical or illegal activities by a single employee or a group of employees or executives for personal or organizational gain. In this situation, an MUFG Bank employee allegedly engaged in insider trading by sharing confidential information about a client's tender offer with a family member, who then profited from stock trades based on that information. This breach of trust and violation of laws designed to ensure fair financial markets exemplifies corporate corruption.
wallace
The employee will be fired. The company will not be fined.
GenHXZ
'Business as usual' nothing will be done about it. Every single bank does this btw.
WasabiWit
Companies are partly responsible for their employee's actions.
Plenty of cases where an individual did insider trading and the company was fined/