The Financial Services Agency on Friday ordered Abraham Private Bank to suspend business for six months with immediate effect, saying the Tokyo-based investment adviser sold investment products without registering itself for the sales.
However, the FSA will allow Abraham to accept investment cancellations in order to protect its customers.
While investment advisers usually provide advice to customers on investment targets, Abraham has recommended certain funds to customers and effectively received sales commissions from these funds, the FSA said.
The Securities and Exchange Surveillance Commission urged the FSA last week to levy an administrative penalty on Abraham.
Abraham has taken advantage of TV commercials and other ads to up its client base. Some 2,800 customers have invested ¥17 billion in investment funds as recommended by Abraham and have incurred no serious losses.