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Scandal at Japanese brokerage widens with executive’s arrest

TOKYO (AP) – The scandal at a top Japanese brokerage widened as the vice president of SMBC Nikko Securities was arrested yesterday and the company was charged with stock manipulation.

The arrest of Toshihiro Sato on charges of violating securities regulations followed arrests earlier this month of four other employees of the Tokyo-based company on the same charges.

The company and some employees are accused of propping up stock prices by putting in massive buy orders, prosecutors said.

Those arrested earlier denied wrongdoing, saying they were just carrying out normal procedures, according to Japanese media reports. Sato’s comments were not immediately available, but the arrest highlights how Tokyo District Prosecutors suspect the top echelons of the company were involved in unlawful stock dealings.

SMBC Nikko did not return calls requesting comment. The company’s CEO Yuichiro Kondo apologised at a news conference earlier this month about the scandal. He said the company was investigating internally to prevent a recurrence.