TOKYO — Yamaichi Securities, one of Japan's 17 major securities companies, said today it faces a loss of $24 million due to one customer's bankruptcy last month.
Yamaichi, on orders from the customer in February, bought 3 million shares--or one-seventh of the total outstanding--of Nippon Seisen, a leading wire maker, at the equivalent of about $44 million for delivery in four days.
Yamaichi was supposed to receive $70,520 in commission, but "the customer, an institutional investor, failed to settle the transaction and went bankrupt on March 30," Yamaichi spokesman Takao Adachi said.
Meanwhile, he said, prices on the Tokyo stock market began to crash and the price of Nippon Seisen's shares plunged to $6.54 a share on Tuesday from $14.65 in February.
"Negotiations for remedy are ongoing. If they fail, the company might bring the case to the court because there's always possibility that manipulation might have been involved in a case like this," Adachi said.
Adachi said the investor, a company operating coffee shops, had been a good customer of Yamaichi during the last two years, although its earlier investments were made on a smaller scale.