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Police arrested eight people Tuesday linked to a defunct Tokyo-based commodity futures trading firm on suspicion that they swindled three company executives out of about 135 million yen, officials said.

Metropolitan Police Department officials said the arrests may be only the tip of a wider futures trading scam that may have bilked as many as 800 investors out of some 9.5 billion yen.

Yoshio Yokoyama, 39, who effectively ran a futures trading firm called Core Creation, which collapsed last April, allegedly worked with seven others to persuade the executives into investing in soybean futures and other commodities on the Chicago Mercantile Exchange from July 1994 to December 1997.

The suspects purportedly requested and received 135 million yen in the form of cash and checks to guarantee deposits for trading on behalf of the three executives. Instead, they pocketed the money to cover their company expenses and gambling, the officials said.

By placing an equal number of sell and buy orders with the CME, they were able to avoid sending money to the market, the officials added.

Also arrested were Sumiaki Imamoto, 46, former president of Core Creation, and Masahiro Tokudome, 56, former vice president of the firm.

According to the officials, Yokoyama and the others deceived the customers, including a 61-year-old company executive in Narashino, Chiba Prefecture, into investing in commodity futures by falsely telling them that soybean and soybean oil prices were taking off and that they were sure to make hefty profits.

When prices fell and the customers suffered losses, the suspects urged them to keep going to recover their losses, the officials said.

Overseas futures trading has often been a hotbed for fraudulent activities. In past crimes probed by police, traders were accused of repeating unnecessary buy and sell orders just to earn commission fees, while others would not accept customer requests to liquidate the investment, insisting they needed to stay in to recover their losses.

Authorities warn that people unfamiliar with the system should avoid investing in futures trading because of the risk of incurring huge losses with very small price fluctuations.

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