Wednesday, May 24 8:04 PM SGT
Japanese watchdog suspends Deutsche Securities
TOKYO, May 24 (AFP) -
Deutsche Securities' branch in Tokyo received unprecedented punishment from Japan's financial watchdog Wednesday after the German brokerage was found guilty of violating several trading laws.
The Financial Supervisory Agency (FSA) slapped a six-month ban on Deutsche Securities from trading over-the-counter (OTC) derivatives and ordered it to publish a newspaper advertisement revising its annual earnings.
"It did not include some of its net profits which were supposed to have gone in the earnings report for the year to March 1999," said FSA official Takushi Fujimoto.
"Instead it placed them in the report for the year to March 2000. Thus we demanded it publish an accurate version of its earning report."
No brokerage, foreign or Japanese, had ever been ordered to take out such a newspaper announcement, FSA spokesman Katsuhiko Sato said.
Deutsche Securities had failed to submit a revised balance sheet despite the failing, he said.
"There was no way for us to find out what was wrong in the balance sheet until after we launched the investigation (last August)," Sato said.
"In most other cases, Japanese brokerage firms have spotted the mistakes on their own and submitted revised accounts to us."
The German broker was also banned from trading corporate bonds for 12 days from May 29, along with a range of shorter suspensions from trading in other instruments including Japanese government bonds.
The FSA found the broker guilty of trading OTC derivatives without the mandatory official permission.
It allegedly sold investment products to help Japanese corporate clients suffering capital losses on bond holdings, and failed on other occasions to submit transaction reports on completed futures trading deals.
Deutsche Securities also made securities futures trades on behalf of its parent group, Deutsche Bank AG, and failed to report these properly.
The German unit becomes the fourth foreign financial institution targeted by the FSA since the body was set up in June 1998 with a mission to revitalise Japan's crumbling financial industry. (cont)
sg.dailynews.yahoo.com |
