Reflecting an increase in crimes involving financial firms, the nation’s securities watchdog filed a record five criminal complaints during the year up to June, according to the annual report released Oct. 1 by the Securities and Exchange Surveillance Commission.The cases brought to prosecutors include one against Nomura Securities Co. over alleged loss compensation to a “sokaiya” corporate racketeer, three suspected instances of insider trading and one incident of spreading rumors regarding certain shares. As a result, the number of criminal complaints filed with prosecutors has reached a total of 11 over the five years since the body was created in 1992.The report points out that while the importance of compliance with trading rules was in general becoming more widely accepted, it is hard to say companies and individuals in the securities business are fully aware of the need to follow them. This observation has been included in the report because of the recent scandal regarding alleged paybacks to a racketeer by all of the nation’s Big Four brokerages — Nomura, Daiwa Securities Co., Nikko Securities Co. and Yamaichi Securities Co.Investigations into the allegations against the three firms, other than Nomura, did not take place during the year and were not covered by the report. The SESC’s annual report also shows that the number of instances in which ministerial-level administrative actions were recommended against securities firms or employees for serious violations during the year came to 11 — the second-largest figure for a single year.Among these cases, officials noted that, for the first time, a recommendation was issued for the breaching of a “fire wall” between brokerages and banks in a parent-subsidiary relationship. An employee at one bank’s securities subsidiary received documents containing unreleased information regarding a client firm drawn up by another brokerage through the parent bank, something banned under the Securities and Exchange Law.During the year covered by the report, the commission inspected 83 brokerages and seven financial institutions authorized to handle securities transactions.
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