The Securities and Exchange Surveillance Commission plans to file a criminal complaint against corporate extortionist Ryuichi Koike on suspicion that he demanded financial favors from Yamaichi Securities Co., investigation sources said August 1.
Prosecutors and the securities watchdog jointly raided the headquarters of the nation's fourth largest brokerage this week, as well as the homes of its president and chairman, over its alleged questionable ties with the "sokaiya" extortionist, who is also at the center of the scandal involving Nomura Securities Co. and Dai-Ichi Kangyo Bank.
Sources close to the securities watchdog said Yamaichi guaranteed a 10 percent yield on money that Koike asked it to manage in 1994. Yamaichi acquiesced and gave the guarantee in June that year in response to Koike's demand, in violation of the Commercial Code, that it invest 300 million yen of his money and guarantee returns of at least 10 percent within six months, the sources said.
Guaranteeing returns on customers' investments and conducting discretionary trading for clients are banned under the Securities and Exchange Law. Although Yamaichi incurred a loss of more than 30 million yen on Koike's "investment," it still paid the extortionist 79 million yen in January 1995 by taking profits earned through Nikkei stock index futures trades on the Singapore International Monetary Exchange, the sources said.