The Finance Ministry slapped administrative penalties July 30 on Nomura Securities Co. and Dai-Ichi Kangyo Bank lasting from five months to a year for their roles in one of the biggest financial scandals to hit the nation this decade.
They are the harshest sanctions ever meted out by Japanese financial regulators. The punishment, personally handed to the presidents of the two firms in the afternoon for the financial favors they showered on a "sokaiya" corporate racketeer, include the suspension of Nomura's equity-related proprietary transactions -- dealings under its own account as opposed to brokering for clients -- and a ban on credit extension to new customers by Dai-Ichi Kangyo Bank from Aug. 6 to Dec. 31.
It is the first time the ministry has ordered a relatively healthy bank to suspend a portion of its operations, and the harshest punishment ever given to a brokerage. Both institutions were told to draw up a plan of specific steps to correct internal operations to be submitted to the ministry by Sept. 19, and Dai-Ichi Kangyo is required to report every six months on progress being made.
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