Sumitomo Mitsui Said to Fire Banker Amid Insider Trading Probe
Sumitomo Mitsui Financial Group Inc. (8316)’s lending unit fired a senior banker amid a government investigation into insider trading, two people with knowledge of the matter said.
The Securities and Exchange Surveillance Commission is considering asking prosecutors to pursue a criminal case over the trades, said three people, who asked not to be identified because the investigation isn’t public. The person hasn’t been accused of wrongdoing.
Japanese regulators are cracking down on insider trading after recent cases eroded confidence in the nation’s capital markets. As well as Sumitomo Mitsui, Japan’s second-biggest banking group, companies being examined include Nomura Holdings Inc. (8604), the country’s largest brokerage, and JPMorgan Chase & Co.
The banker was seconded to the company’s SMBC Nikko Securities Inc. brokerage unit from Sumitomo Mitsui Banking Corp. when the trades were made, two of the people said. Takashi Morita, a spokesman for Sumitomo Mitsui Banking in Tokyo, declined to comment, as did SMBC Nikko spokesman Tadataka Ishida.
SMBC Nikko said on Oct. 6 that it is being investigated by the commission for a possible insider-trading violation by an executive and that it is “fully cooperating” with the probe.
The Mainichi newspaper said today that a former SMBC Nikko executive may be indicted by Yokohama prosecutors over a 2011 insider-trading case. A spokeswoman for the Yokohama District Public Prosecutors’ Office, who asked not to be named because of the organization’s policy, declined to comment.
An SMBC Nikko banker last year allegedly told an acquaintance that managers of Enoteca Co., a wine importer, were preparing to buy the company’s shares in a tender offer, the Asahi newspaper reported in October. The acquaintance traded the stock before the buyout was announced, the newspaper said.
SMBC Nikko has already been penalized for a separate information leak. The Financial Services Agency ordered the brokerage in April to improve its business after 23 sales staff were found to disclose information to 34 clients before an unidentified company’s announcement of an equity offering. The firm said on April 20 that it will take proper actions against employees who were involved in the violations.
Nomura on June 8 apologized for its employees’ role in leaking information ahead of share sales that the investment bank managed in 2010. The acknowledgment confirmed that it was the unidentified underwriter found by the SESC to have provided information on public offerings by Inpex Corp., Mizuho Financial Group Inc. and Tokyo Electric Power Co.
The SESC found that an employee of JPMorgan (JPM) gave information on a 2010 offering by Nippon Sheet Glass Co., according to two people with knowledge of the matter. New York- based JPMorgan said on May 29 that it’s “cooperating fully” with the authorities on the matter.
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