Holy sh--!!!! Martin Armstrong's crew collared????
biz.yahoo.com
biz.yahoo.com
FOCUS-Japan firms warn of losses on Princeton bonds
By Miki Shimogori
TOKYO, Sept 13 (Reuters) - Seven listed Japanese companies said on Monday their earnings may be considerably hurt by losses on financial products issued by U.S. investment firm Princeton Economics International.
The announcements came after Japanese financial regulators warned last week that some 120 billion yen ($1.1 billion) worth of privately placed bonds currently held by domestic investors with Princeton may have lost most of their value.
Japan's Financial Supervisory Agency (FSA) last week banned the Tokyo branch of U.S. securities firm Cresvale Group from selling bonds issued by Princeton, its parent firm, saying Cresvale had broken regulations by failing to hold clients' investments in separate accounts.
The security of those assets is now in doubt, despite Cresvale Tokyo's statement last week that the funds were protected in segregated accounts at Republic New York Securities, a brokerage unit of bank holding company Republic New York Corp.
The seven Japanese firms, including electronics maker Alps Electric Co Ltd and machinery maker Amada Co, announced on Monday their groups hold a total 62.6 billion yen worth of the privately placed Princeton notes.
The other firms are Gun-Ei Chemical Industry, Amada Sonoike, a unit of Amada, electronics firms Kaga Electronics and Chudenko, and bookstore operator Maruzen.
The three firms with the biggest exposure to Princeton notes were Alps, which said its group held a total 21.8 billion yen worth of Princeton notes, followed by Chudenko with 13 billion yen and Gun-Ei Chemical with 11.79 billion yen.
The seven said they will soon make public the impact of the possible securities losses on their earnings.
Shares in the firms slumped in Monday trade in Tokyo. Gun-Ei sagged 18.44 percent or 45 yen to 199, making it the top percentage loser on the Tokyo Stock Exchange's first section, followed by a 15 percent fall in Alps' shares.
Japanese media speculated that the firms may have bought the Princeton notes to enable them to postpone reporting losses.
A Princeton unit, Princeton Global Management, a little-known New Jersey investment manager, is at the heart of a probe by U.S. and Japanese authorities into Republic New York Securities but has denied being engaged in any fraudulent transactions.
The investigation, which has stalled Republic's planned $10.3 billion merger with Britain's largest banking group HSBC Holding Plc, is centred on whether the brokerage's dealings with Princeton, which primarily manages money for Japanese investors, were above board.
Japan's FSA has been investigating whether foreign-owned brokerages helped Japanese firms hide losses through complex derivatives deals. In July, the regulator withdrew the licence of the Tokyo derivatives unit of Switzerland's Credit Suisse Group.
Princeton said last week that it sold $2.4 billion of financial instruments to Japanese investors from 1996 to March 1999 and has paid back $2.1 billion in redemptions.
''We do not deny that some rescue deals with Japanese corporates involving notes that are expressed in book value rather than market value have been issued in Japan,'' Princeton said.
''We understand this was not inconsistent with market practice in Japan at the time and that such deals were entered into with the full knowledge of investors.''
It added speculation by the media that Princeton has engaged in fraudulent transactions is ''completely without merit.''
($1=107 yen)
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