Who's Messing With The Japanese Market?

A stock dispute spotlights the pitfalls of Japanese trading

Hiroshi Teramachi is well known around Tokyo as chairman of THK Co., the patriarch of one of Japan's richest industrial families, and a high-stakes investor in everything from Chinese medicine to knitting machinery. So nobody lifted an eyebrow when a caller named Utsugi phoned Compagnie Financire de Paribas' Tokyo asset-management unit late last year and said Teramachi wanted to buy 856,000 shares in a small auto-parts maker, TDF Corp. Nor did any alarm bells sound when Nomura Securities Co. received a buy order from Teramachi's company for 1.7 million more shares of TDF on Jan. 17. Nomura, after all, was THK's underwriter, and it's not uncommon for clients to put in big orders by phone and see them executed immediately.

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