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FSA had tips that AIJ was fraudulent

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  • FSA had tips that AIJ was fraudulent

    It seems to me that the FSA needs to be raided as well – as it is clear that they could have prevented much of the loss from occurring had they taken action back in 2005.

    Knowing that funds are not required to have external audits – means that they knew that they were the only line of defense against fraudulent practices.

    In addition to the charges to be placed on these perpetrators – IMO, charges should be brought against those responsible in the FSA as well.

    http://jen.jiji.com/jc/eng?g=eco&k=2012031300404

    Authorities Tipped Off about AIJ before Loss Revelation

    Tokyo, March 13 (Jiji Press)--Japanese financial authorities were tipped off about suspiciously high investment returns offered by AIJ Investment Advisors Co. before the revelation of a huge loss on its client assets, Financial Services Minister Shozaburo Jimi said Tuesday.
    Such information about AIJ, which was ordered to suspend operations by the Financial Services Agency late last month, had been given to the Securities and Exchange Surveillance Commission and the FSA, Jimi told a news conference.
    According to Jimi, four pieces of information about the company, three from anonymous sources and one named, were given to the SESC between 2005 and January, when the securities market watchdog launched a probe into the company. Also, officials linked to a newsletter on pensions also provided information for several times.
    These people cast doubt on AIJ Investment's claims of asset management with high returns that always exceeded the market's average. But the authorities apparently did not start full-fledged investigations.
    AIJ Investment has lost most of some 200 billion yen in assets of clients including pension funds, but it continued to lure customers by advertising high returns. Damage ostensibly expanded as the authorities failed to use the information from outsiders in supervising the investment advisory firm.

  • #2
    What are you talking about? It only took six years - by Japanese standards that's approaching the speed of light. You have to consider the fact that each report takes about 2.5 years to fill out the paperwork, create the appropriate committees, have committee meetings to discuss when they will discuss the report, and then to actually discuss the report. Then another six months of follow-up paperwork to the meeting.

    I can't believe it only took them six years.

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    • #3
      Originally posted by Effected After View Post
      What are you talking about? It only took six years - by Japanese standards that's approaching the speed of light. You have to consider the fact that each report takes about 2.5 years to fill out the paperwork, create the appropriate committees, have committee meetings to discuss when they will discuss the report, and then to actually discuss the report. Then another six months of follow-up paperwork to the meeting.

      I can't believe it only took them six years.
      Yes, well - I see that the fraud started in 2002, so the FSA took 9 years - but then who is counting? Certainly not the FSA, nor the non-existent auditors.

      But it does look like they will change a few management oversight rules - like requiring external audits, but IMHO - they should just adopt the Chinese solution to fraud - execution within a week of the court finding.

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