The Securities and Exchange Surveillance Commission has recommended the Financial Services Agency issue administrative punishment to Abraham Private Bank Ltd. for unlicensed sales of investment products.
Given Thursday’s recommendation, the FSA will consider punishing the Tokyo-based investment advisory firm, which offers a private pension service. The penalty will likely include an order to partially halt operations.
Japan requires sellers of investment products to be registered. The securities market watchdog determined that an overseas affiliate of the firm, which did not register, received rewards from five investment funds in accordance with the value of investments in their products by Abraham clients.
The SESC alleges the money from the investment funds was then circulated to Abraham’s parent company, which they believe is virtually the same entity as Abraham.
The assets of Abraham’s clients, however, are managed by the investment funds and have not been lost, unlike with AIJ Investment Advisors Co., which lost most of its clients’ pension money.