The Tokyo District Court sentenced Koichi Hirata, former president of now-defunct Minami Securities Co., to 11 years in prison Tuesday for misappropriating 2.8 billion yen in securities that belonged to his clients and separately swindling money from investors.
The court also sentenced Kimitaka Mori, a former executive of the Maebashi, Gunma Prefecture-based brokerage, to three years in prison for conspiring with Hirata in the fraud.
Prosecutors had demanded 13 years for Hirata, 38, and four years for Mori, 57.
According to the court, Hirata conspired with Yoshio Suzuki, another former Minami Securities executive, and a securities broker named Sei Inoue to embezzle stocks and other securities to pay for their debts on March 6, 2000.
Suzuki and Inoue are now appealing their embezzlement convictions in separate district court trials.
In 1999, Hirata and Mori bilked three investors out of a combined 110 million yen by selling funds managed by dummy companies.
In June 1999, Hirata became president of Minami Securities, set up in 1960. The brokerage suffered heavy losses with the collapse of the bubble economy and was declared bankrupt by the Tokyo District Court on March 21, 2000.