(Bloomberg) -- An employee at the Tokyo Stock Exchange is being investigated by the Japanese securities watchdog on suspicion of insider trading, an embarrassment for the organization that’s been spearheading efforts to improve corporate governance.
Japan Exchange Group Inc. is fully cooperating with the Securities and Exchange Surveillance Commission’s investigation into the employee at the firm, said the operator of Asia’s second-largest exchange known as JPX, in a statement on Wednesday.
The watchdog raided the exchange staffer’s home in September on suspicion of leaking listed firms’ information on tender offers before the data was disclosed to the public, Japan’s business daily Nikkei reported. JPX shares closed 0.78% lower after falling as much as 1.9% to the least in about a month.
The investigation is “extremely regrettable” and the exchange must make sure it won’t let that happen again to ensure credibility in Japan’s financial markets, said Deputy Chief Cabinet Secretary Kazuhiko Aoki at a regular news conference.
The exchange is urging listed companies to bolster governance and take steps to push up shareholder returns. That’s helped elevate the country’s stock prices to record highs this year. Japanese companies have announced all-time high shareholder returns including stock buybacks in reaction to the official push.
While rising stock prices have brightened the mood in Japan’s equity market, other cases of insider trading and breaches of rules recently have clouded the outlook. Local media reported earlier in the week that a judge was probed for suspected insider trading while a worker at MUFG Bank Ltd., the country’s largest lender, was implicated in June for improper trading. Further in the past, the nation saw a former executive at SMBC Nikko Securities Inc. caught conducting insider trading in 2012.
--With assistance from Akemi Terukina.
©2024 Bloomberg L.P.