The Finance Ministry slapped Nikko Securities Co. with a maximum one-month partial suspension of operations Friday for offering trading profits to a Diet lawmaker who killed himself earlier this year.
The ministry ordered the brokerage to suspend stock-related transactions on its own account from April 10 to May 9. The order includes trading in stock index futures and stock options.
Nikko was also told to halt brokerage transactions such as those of securities and securities futures from April 10-30 at its Shimbashi branch, the place where the late Lower House lawmaker Shokei Arai opened an account under the name of an acquaintance. Nikko would also be barred from underwriting and bidding in public auctions of public bonds until April 20.
The firm, along with former vice president Yumio Hiraishi and former managing director Hiroyuki Hamahira, was indicted by prosecutors for violating the Securities and Exchange Law by offering extra profits to Arai between October 1995 and June 1996.
The Securities and Exchange Surveillance Commission says that during this time, the profits unlawfully channeled to Arai, who hanged himself just before he was expected to be stripped of Diet immunity and arrested, reached about 29 million yen.
In December, administrative punishment in the form of a temporary operation suspension order was issued to Nikko in a separate case related to loss compensation for a "sokaiya" corporate racketeer. The final portion of the ban was lifted only last month.
Ministry officials said the duration portion of their decision was reached after taking into account the amount and number of times Nikko gave Arai the additional profits. Nikko's exclusion from bidding and underwriting of bonds is to last only 11 days, but officials pointed out that the firm has been excluded since March 10, pending the finalization of penalty decisions.