US orders Daiwa Bank shutdown
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.DAVID USBORNE
New York
RICHARD LLOYD PARRY
Tokyo
Daiwa Bank in New York, which is embroiled in a $1.1bn bond trading scandal, was ordered last night to shut down its entire American operations and face conspiracy and fraud charges which, if proven, could mean fines of more than $1bn.
The authorities accused the Japanese bank of attempting to cover up trading losses and concealing its activities from regulators.
If found guilty of the 24 separate charges Daiwa could face fines up to $1.3bn, the highest penalty ever imposed on a US financial institution.
The manager of Daiwa's New York branch, Mashiro Tsuda, was due to appear in court last night on charges of conspiracy and cover-up. If found guilty, he could face up to eight years in prison.
Daiwa and several of its senior executives are accused of trying to conceal from US banking regulators the activities of a former vice president of the bank, Toshihide Iguchi, who pleaded guilty in New York early last month to losing $1.1bn in trading US bonds over 12 years.
Announcing the new charges yesterday, US Attorney Mary Jo White alleged that bank executives tried to hide what had happened from US authorities during a period from mid-July, when they first received a confession from Mr Iguchi, until late September. As part of the effort, Mr Tsuda told Mr Iguchi to erase the computer disc on which had stored the confession.
Daiwa Bank announced simultaneously that it was co-operating with the order to close all its US offices by 2 February 1996.
"Withdrawal from the United States is regrettable but necessary," said Takashi Kaiho, president of Daiwa Bank.
The bank also announced a restructuring of international operations, with the loss of 2,600 jobs. Many operations to be closed were acquired from Lloyds Bank in 1990.
The bank is accused of repeatedly misleading bank examiners over a period starting in the late 1980s. Charges include failing to separate its settlements office in lower Manhattan, where Mr Iguchi worked, and its mid-town trading offices. As part of this deception, the bank would disperse bond traders whenever US regulators paid a visit and disguise their trading room as a store, Ms White alleged.
The authorities in Tokyo areconsidering closing all Daiwa Bank's foreign exchange operations. Seven weeks after the scandal broke, the bank looks increasingly isolated from the Japanese financial establishment. A plan to improve the bank's internal inspection systems was publicly rejected by the Ministry of Finance, an indication of its anger at Daiwa's handling of the affair.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments