OSAKA -- Victims of an allegedly fraudulent financial scheme by a failed Osaka firm said Tuesday they will ask the government to buy securities that were purchased but later found to be worthless.
Lawyers for the group said the case caused "major damages totaling around 110 billion yen, and affecting some 17,000 people."
They claim Finance Ministry officials should have recognized that the company, Daiwa Toshi Kanzai, may have had problems.
Daiwa Toshi Kanzai, a mortgage-backed securities broker based in Osaka, was first investigated by the Finance Ministry in July 2000. It was then denied renewal of a license to sell such securities in December before the government declared it insolvent in April.
Hiroshi Toyonaga, a former president of Daiwa Toshi Kanzai, and 18 others were arrested Nov. 6 for allegedly defrauding clients by misrepresenting the financial products of the company's affiliates.
The victims' lawyers proposed that the national government cover the entire value of securities bought by the victims, unlike two earlier cases in the '90s when the state-run Deposit Insurance Corp. offered 85 percent of the value of mortgage securities sold by firms that later went bankrupt.
The lawyers argued for full coverage because the victims were defrauded.
The proposal will be presented to the Financial Services Agency next month, the lawyers said, adding they hope to reach an agreement with the government by March.