The Finance Ministry on Friday canceled the business registration of Minami Securities Co. for its allegedly fraudulent sales of corporate bonds and dubious asset management, saying the local brokerage violated the Securities and Exchange Law.
It is the first time financial regulators have canceled the registration of a brokerage since the registration system was launched in 1998. The system was implemented as part of Japan's deregulation of the financial industry, which was previously licensed.
The ministry's Kanto Local Finance Bureau made the decision after the Securities and Exchange Surveillance Commission, Japan's securities watchdog, on Wednesday recommended financial regulators punish the small securities house based in Maebashi, the capital of Gunma Prefecture.
The commission said Minami Securities violated the Securities and Exchange Law by selling 210 million yen worth of corporate bonds issued by three dummy companies to 51 investors last November, claiming the bonds were safe, high-yield investments.
The Japan Securities Dealers Association said earlier in the day that it will dismiss Minami as a member.