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Japanese brokers accused in US

Larry Black
Monday 04 January 1993 19:02 EST
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THE NEW YORK offices of Japan's four large international brokerage houses are to be charged by the Securities and Exchange Commission with employing unlicensed brokers, including Japanese nationals, an executive at one of the firms confirmed yesterday.

The four - Daiwa Securities, Nomura Securities International, Nikko Securities and Yamaichi Securities - have begun settlement talks with the SEC but no agreement on possible penalties has been reached.

While the SEC would neither confirm nor deny the impending charges, an earlier report in the Japanese press suggested the fines would be minimal, ranging from dollars 50,000 against Nomura to more than dollars 300,000 for Daiwa.

Daiwa is also to be charged with additional violations of US securities laws in connection with the Salomon Brothers bond auction scandal. Salomon's US government bond desk, in addition to using clients' names to bid for more than its share of US Treasury auctions, also arranged for other firms to bid on its behalf.

Daiwa confirmed earlier that it was the unnamed firm cited in the SEC's investigation of the scandal and had bought dollars 3bn worth of US government bonds for Salomon during a 1989 Treasury auction.

Separately, Salomon Brothers announced yesterday that it had settled a pay dispute with two of four senior executives who resigned in the wake of the bond scandal.

Thomas Strauss, the former president, has been allowed to keep 145,000 share options due to him before his August 1991 resignation - possibly worth about dollars 2.87m. John Meriwether, the former vice-chairman, was paid dollars 1.7m in lieu of his share of Salomon's employee-ownership plan, as well as dollars 8m in salary for the first seven months of 1991.

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