GARBAN-INTERCAPITAL, the broker dealer, looks set to become the latest foreign financial markets operator to face disciplinary action from the Japanese authorities for alleged securities regulations offences.
Japan's Securities and Exchange Surveillance Commission yesterday recommended action be taken after it found that Garban had broken Japanese securities law on no less than 483 counts in 1999.
According to the authorities, Garban breached regulations by "bucket trading": that is, executing 75bn yen ($711m) of client transactions on its own account rather than as a broker. The company made 164m profit from the transactions, including 2.6m in fees. The firm also said it would refund the estimated $25,000 clients had been overcharged. Garban attributed the incidents to computer error.
Bryan Massey, chief executive of Garban International Japan said: "We deeply regret this incident and have identified an unintentional lapse in our internal controls which led to Japanese securities law being accidentally breached. Steps have already been taken to ensure that such errors do not reoccur and we are fully compliant with all regulations. …