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Very suspicious and unfair news (an example of government corruption?)
It is a story about the Japanese government, t… I just found out about something quite interesting recently and I haven't heard anything about it here so I thought to make a post to bring it to light.
It is a story about the Japanese government, through the Financial Service Agency (FSA), unfairly giving severely harsher penalties to one company versus another, even though both were involved with market manipulation.
About a year ago, it came to light that SMBC Nikko Securities was involved in market manipulation. Initially, four executives were arrested in relation to this, two of which were foreign residents and two were native Japanese. Two additional people were later also arrested, with one of them dying after intense interrogations. SMBC Nikko was given a penalty of 700 million + 4.4 billion yen penalty to the company. One executive has already been sentenced to 18 months imprisonment, with the other executives still going through the court system.
https://www.reuters.com/markets/stocks/japanese-prosecutors-investigating-smbc-nikko-after-management-arrests-asahi-2022-03-08/
https://dailyuknews.com/business/smbc-nikko-complained-to-regulators-over-traders-death-after-questioning/
https://www.japantimes.co.jp/news/2023/02/13/business/corporate-business/smbc-nikko-700-million-fine/
Late last year, SBI Securities was discovered to be also involved in market manipulation through the promotion of its IPO business. As of January 12th, the penalty given to SBI Securities was to suspend part of it's business operations from January 12th to the 18th by not soliciting trade orders from clients. Thats it.
https://www.japantimes.co.jp/business/2024/01/13/companies/japan-biggest-online-brokerage-punished/
https://japannews.yomiuri.co.jp/business/companies/20240114-161968/
It honestly seems like this was likely done for reasons of corruption. I believe SBI Securities hires the most retiring members of FSA as compliance officers (citation needed), and so the weaker penalty given to SBI Securities was due to the relationship that SBI Securities has with the FSA compared to SMBC Nikko.
I have friends who work at both places, and the culture difference is night and day. SMBC Nikko is old school, suits and ties, the kind of place where people still use fax machines. SBI is more like a tech startup, jeans and hoodies, and they openly brag about hiring ex-FSA people. The FSA office is a 10 minute walk from SBI's headquarters in Otemachi, and I've seen their compliance officers having lunch together at that soba place near the Mitsubishi Building. It's hard to believe that proximity doesn't affect how seriously one gets treated versus the other.
yeah the timing of it all is pretty telling too. SMBC Nikko got hit right when the government was trying to show it was tough on white collar crime, but by the time SBI's case came up the heat had died down. convenient timing for sure
honestly this is a pretty well known pattern in tokyo finance circles, the amakudari system where regulators retire into cushy jobs at the companies they used to oversee is basically baked into how things work here. SBI is famously aggressive about scooping up FSA retirees, it's not even a secret, they list it in their annual reports sometimes
the SMBC Nikko case had that death during questioning which changed everything though, prosecutors couldn't back down after that without looking like they were covering something up. once someone dies in custody the whole thing gets kicked up to a different level of scrutiny, the media attention alone forced their hand
the real corruption imo is how normal and accepted this double standard is. walk around Otemachi any lunch hour and you'll see ex-FSA guys in suits having meetings at cafes with their old colleagues still at the agency. it's just how business gets done here, the SBI penalty was a slap on the wrist because that's the relationship they built
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Whitebox in Tokyo 2026: Is It Still Worth It?
yeah the old Whitebox spot got gutted around then, last I walked past it was a startup office on the upper floors. kuramae's decent but honestly Kiyosumi-Shirakawa side is quieter and the rents are still half of Shibuya. miyamasuzaka is basically all towers now.
kuramae's rents crept up too since the tawaman went in, kiyosumi side is still the better bet
whitebox actually closed back in 2018, the space is a gallery-slash-coworking thing now. shibuya's still fine to live in but the rents near miyamasuzaka have jumped hard, more office towers than studios these days. if you want that old creative vibe try kuramae or kiyosumi instead