The Financial Services Agency ordered the Bank of Tokyo-Mitsubishi UFJ on Monday to improve its business practices after a probe by authorities exposed poor treatment of investment trust services customers.

The financial watchdog ordered the bank to submit a business improvement plan by July 11 and report on its progress every three months. The agency also ordered the bank to punish the person or persons responsible for the errors.

The order is the first the FSA has given a bank regarding over-the-counter sales of investment trusts and the fifth slapped on the Mitsubishi UFJ Financial Group in the past six months.

BTMU has failed to respond properly to complaints from its customers about unexecuted or erroneous orders that led to losses, the FSA said.

In many cases, the bank did not offer compensation or waited until customers complained, an FSA official said.

BTMU said there were 99 such cases between 2003 and 2006, with the amount of unpaid compensation reaching 2.42 million yen.

BTMU President Nobuo Kuroyanagi admitted to the charges and apologized to customers. The bank started selling investment trusts in 1998.

While such acts are not a “clear violation of law,” the bank did not comply with the de facto standard that brokerages selling investment trusts are well aware of, which is to apologize and compensate for losses, the FSA official said.

However, the FSA said it could not judge whether the acts were intentional.

“We chose to issue a business improvement order instead of a business suspension because MUFG has been beefing up its corporate compliance system since the order issued to it in February,” the FSA official said.

The banking group has created the new position of chief compliance officer and set up corporate compliance sessions to train its officials, the official said.

The order is just the latest for the megabank. In February, the FSA partially suspended MUFG’s core banking unit for maintaining inappropriate ties with an embezzler. It also ordered Mitsubishi UFJ Securities Co. to improve its operations after discovering it engaged in illegal proprietary trading activities.

In December, U.S. regulators punished MUFG for having lax measures against money-laundering. China’s central bank punished an MUFG branch in Shenzhen last spring, also for money-laundering.

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