TOKYO — Japanese prosecutors have launched a criminal investigation into Japan's biggest brokerage, Nomura Securities Co., for allegedly manipulating the share price of railway company Tokyu Corp. in 1989, a senior Justice Ministry official said Thursday.
Nomura, under heavy fire for improperly providing compensation to cover investment losses among its favored clients, has also been accused of suspicious ties to Japan's yakuza crime syndicates.
Kazutomi Ijima of the Justice Ministry's criminal bureau told a hearing by the Finance Committee of parliament's Lower House that prosecutors were investigating the allegation against former Nomura President Yoshihisa Tabuchi, who resigned from that post last month after the scandals broke.
Ijima's statement followed formal legal complaints filed by an irate Japanese investor and Al Alletzhauser, British author of "The House of Nomura."
"Law authorities are investigating Nomura based on the two complaints," Ijima said.
The price of Tokyu Corp. shares soared between October and December of 1989.
According to the complaints, Nomura allegedly manipulated the share price. Nomura has denied the allegations, including charges that it boosted Tokyu's price to benefit a leading underworld boss.
Senior Ministry of Finance official Nobuhiko Matsuno told the parliamentary committee hearing earlier Thursday that the ministry so far had not found that Nomura violated MOF's 1974 directive prohibiting a brokerage from boosting a company's share price.
The chairman of the Tokyo Stock Exchange, Minoru Nagoaka, told the committee earlier in the day that the exchange had been unable to determine that Nomura manipulated Tokyu's share price.