Star Japanese Fund Manager Facing Insider Trading Charges

by Mary Swire, for LawAndTax-News.com, Hong Kong

06 June 2006

The fallout from the scandals that have hit Japanese internet firm Livedoor has continued to spread, with leading Japanese fund manager, Yoshiaki Murakami the latest victim.

Earlier this year, in a separate matter, Livedoor boss, Takafumi Horie and several of the internet firm's other executives were indicted, charged with breaching Japan's securities laws.

The men stand accused of misleading investors and artificially inflating company profits, and are currently standing trial in Tokyo's District Court.

Mr Murakami, however, was arrested on Monday on insider trading charges relating to Livedoor's ultimately abortive takeover bid for Nippon Broadcasting System Inc.

According to reports, Mr Murakami was informed of the bid by top Livedoor executives in late 2004. The fund that he managed owned shares in the group with which NBS was affiliated, and accumulated a larger stake in the run-up to the takeover bid, which was launched in February 2005.

The disgraced fund manager was quoted by Reuters as explaining that:

"I didn't think Livedoor had the wherewithal to actually go through with it. I didn't buy the shares because of it, but it's true that I heard what I heard."

Mr Murakami, who is reportedly facing a three year custodial sentence, or a three million yen fine, told a news conference prior to his arrest that:

"Rather than spend two years fighting about it in court, I decided the best thing would be to agree with the prosecutors. I consider myself a pro among pros in this securities market. I had to consider the outside possibility that I made a mistake."

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