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Sumitomo Mitsui Launches Probe After 4 Executives Arrested

Japanese media reported four executives were detained after prosecutors searched the brokerage in an inquiry into alleged market manipulation.

The four arrested are suspected of trying to prevent a decrease in share prices for five individual stocks on the Tokyo Stock Exchange. Photo: Reuters


Sumitomo Mitsui Financial Group‘s brokerage unit said on Saturday it has set up an investigation committee following the arrest of four of its executives over alleged market manipulation.

Tokyo prosecutors arrested executives of SMBC Nikko Securities on Friday, the brokerage said without giving further details.

But Japanese media reported that four executives were arrested after the prosecutors searched the brokerage’s headquarters in an inquiry into alleged market manipulation.

At issue are so called “block offers” after-hours transactions that SMBC Nikko conducted in late 2019 through 2020 for investors selling specific stocks in large volumes, according to local media.

The brokerage house launched buy orders for those stocks on the Tokyo Stock Exchange to prevent closing share prices from falling far from levels at which the investors were willing to sell, they said.

Mainichi Shimbun named the arrested executives as Trevor Hill, the 51-year-old head of the company’s equity department. The other three suspects are deputy equity chief Alexandre Avakiants, 44; Makoto Yamada, 44; and Shinichiro Okazaki, 56.

The four denied the allegations during voluntary questioning, the Kyodo news agency said, claiming the moves were legitimate trades.

Stock manipulation is a violation of the Financial Instruments and Exchange Act is punishable by up to 10 years in prison or fines of up to 10 million yen ($87,160), or both.

It is rare for Tokyo prosecutors to raid a major Japanese securities company for market manipulation charges, Mainichi said.

However, the Securities and Exchange Surveillance Commission, Japan’s securities watchdog, also raided the brokerage last year.

The investigation committee consists of three lawyers, Sumitomo Mitsui Financial Group said.


  • Reuters with additional editing by George Russell



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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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