Japan’s banking minister said Tuesday that Tokyo may usher in tighter insider trading laws amid a widening criminal probe into the practice, which is commonplace in the nation’s finance sector.
“We want to consider necessary measures after reviewing and sorting out recurrent similar [insider trading] cases,” Tadahiro Matsushita told reporters, according to the online edition of the Nikkei business daily.
Matsushita, head of Japan’s Financial Services Agency, made the comments a day after prosecutors arrested former SMBC Nikko Securities executive Hiroyoshi Yoshioka and three others on insider trading allegations.
Yoshioka, 50, is suspected of leaking material information to the head of a Japanese finance company and his son, with the trio reportedly netting more than 2.0 million yen ($25,000) from illegal trades.
Matsushita on Tuesday called the arrest “extremely regrettable,” signalling that the financial sector regulator would take strict action including possible fines on SMBC Nikko, one of Japan’s biggest asset managers.
In a statement released late Monday, the company apologized for the arrest, and promised to cooperate with authorities in their investigation.
Insider trading, which usually draws huge fines and jail time in the West, is largely tolerated in Japan’s financial world with recent fines coming in at around just $1,500, while criminal convictions are few and far between.
But the probes have sparked renewed pressure to crack down on lax regulations and legal loopholes, which have dented Japan’s corporate governance image.
Earlier this month, Japan’s market watchdog called for a New York firm to be slapped with a 14.7 million yen penalty for trading on confidential information about a $6.3 billion share sale by Tokyo Electric Power (TEPCO) in 2010.
That was the agency’s first-ever action against a foreign company for insider trading.