Japan’s securities watchdog is planning to call for a bank and two brokerage firms under Mitsubishi UFJ Financial Group Inc. to be punished over allegations they shared confidential information about customer businesses despite being refused permission, a source familiar with the matter said Friday.
The Securities and Exchange Surveillance Commission is considering recommending the Financial Services Agency take punitive action as early as next week against MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities Co. and Morgan Stanley MUFG Securities Co.
File photo taken in November 2022 shows the building in Tokyo’s Kasumigaseki area that hosts the Securities and Exchange Surveillance Commission. (Kyodo)
The two securities firms are alleged to have used information shared by the bank for sales activities. MUFG Bank also is accused of telling business customers they would only be extended financing on the condition they work with the brokerages, according to the source.
The Financial Instruments and Exchange Act requires a “firewall” be put in place to stop information sharing among related banks and brokerages and stipulates they cannot transfer confidential information about customers if they refuse.
The commission will examine when the information sharing started and which entity directed it. It also plans to investigate the culpability of the parent company, Mitsubishi UFJ Financial Group.
Finance Minister Shunichi Suzuki declined to comment on the case, only saying, “The Securities and Exchange Surveillance Commission carries out its duties independent from the Financial Services Agency.”
In 2022, two group companies of Sumitomo Mitsui Financial Group Incl. — Sumitomo Mitsui Banking Corp. and SMBC Nikko Securities Inc. — were also found to have shared customer data without gaining consent as part of a wider market manipulation scandal.
The parent company was ordered to strengthen oversight of SMBC Nikko, with the brokerage forced to suspend part of its operations for three months.
==Kyodo
