Five former executives at Japanese brokerage SMBC Nikko Securities were found guilty for their roles in a market manipulation case, marking the culmination of a scandal that rocked Japan’s financial industry.

The Tokyo District Court handed down suspended prison sentences for the firm’s ex-head of equity Trevor Hill and his deputy Alexandre Avakiants, as well as three Japanese former executives. Prosecutors had sought multiyear prison terms for their alleged roles in trying to support stock prices ahead of what are known as block trades.

When the allegations surfaced in early 2022, they shone a spotlight on Japan’s financial sector and led to regulatory penalties against the brokerage. The subsidiary of Sumitomo Mitsui Financial Group, Japan’s second-largest banking group, posted losses and cut costs in the wake of the revelations as clients took their business elsewhere. The firm’s top executives took pay reductions to shoulder responsibility.

Former general manager Makoto Yamada was sentenced to three years’ imprisonment, suspended for five years, the court ruled on Tuesday. Hill and ex-deputy president Toshihiro Sato received two and a half years, suspended for five years. Another former general manager, Shinichiro Okazaki, and Avakiants got shorter suspended sentences.

Judge Kazunobu Eguchi said Yamada’s team made a series of trades to underpin stock prices in order for transactions known as block offers to go though. Hill and Avakiants were aware of the intention behind those trades, he said.

Hill "took it as a matter of course and approved it,” when Yamada indicated to him via a message that he would need to support share prices in one of the deals, Eguchi said. Block trades are off-exchange transactions involving large amounts of publicly listed shares and arranged by brokers.

The case underscores the legal risks for foreign professionals working in Japan. The country’s justice system has faced criticism for its conviction rate of more than 99%, suggesting to organizations including Human Rights Watch that trials are practically foregone conclusions.

Still, criminal proceedings against foreign business executives are relatively rare in Japan. The most high-profile case in recent years was against Carlos Ghosn, the former Nissan Motor chairman, who was accused of financial misconduct and fled the country before he was tried.

It has been more than two and a half years since prosecutors brought charges against the former SMBC Nikko managers and the firm. Ex-manager Teruya Sugino received a suspended prison sentence in 2023 after admitting to the accusations. SMBC Nikko itself pleaded guilty.

SMBC Nikko resumed block offers in April after renaming them retail offers and introducing a tighter internal monitoring of the transactions.