February 24th, 2012.
Japan’s financial regulator, the Financial Services Agency ordered AIJ Investment Advisors Co. to stop operations for a month because the bulk of the Tokyo asset manager’s 183.2 billion yen ($2.3 billion) of client pension funds appears to be missing. The FSA has now begun a nationwide probe of 263 similar firms. Until 2007, asset managers in Japan had to be licensed but under the guise of deregulation, firms similar to AIJ were easily able to go into business.
As early as December of 2008, there was information indicating that the firm had ties to the Japanese underworld, the Yamaguchi-gumi in particular. Japanese law enforcement sources stated, at least one board member (circa 2009) was a former Nomura Securities executive who had been implicated in pay-offs to yakuza backed racketeers during his time at Nomura. The Financial Services Agency has been increasingly ineffective since the Democratic Party of Japan took power and appointed Shizuka Kamei as the Minister of Financial Services. Kamei is well-known for his past ties to organized crime, including receiving a payment of ５億円 (roughly 5,000,000 dollars) into his own bank account from a Yamaguchi-gumi boss. He also received political donations from Susumu Kajiyama, a Yamaguchi-gumi executive known as “the emperor of loan sharks.” The current minister of financial services is Kamei’s political prodigy and a member of Kamei’s small political party.
The FSA’s swift suspension of operations and investigation into AIJ is unprecedented and unusual.
You are probably aware of this happening http://www.bbc.co.uk/news/world-asia-17150847
It sounds like there may be some international cooperation going on possibly?
The US Government freezing assets is a very big deal.
I am aware but I appreciate you taking the time to point it out.
The yazuka are opportunists par excellence. Give ’em an inch and they’ll take a foot. So, it baffles me why the government of Japan is basically inviting them to take yards and yards with its lax oversight of the financial industry. Well, your article offers some compelling reasons why this state of affairs exists in Japan. Historically, the yakuza had to sharpen their wits and survival skills by virtue of being outsiders. Now that they’re indisputably “insiders”, perhaps they’ll get complacent and implode. On the other hand, this would result in “erito” and “crooks” becoming largely indistinguishable, and ordinary citizens will bear the brunt of unchecked government corruption. Gotta love these lose-lose scenarios!
It seems to me that every time Japan Inc. deregulates something that they just open the door to organized crime but maybe the deregulation opens the door to entrepreneurs as well. It just seems that the yakuza always get the best deal out of it. The start of this current disaster began in 2007 when the Japanese government decided that investment advisors didn’t need to be certified anymore, just registered. Now they have to deal with 260+ firms that sprang up after they opened the doors.