Katayama: Refrain from commenting on probe over Mizuho Sec

Katayama: Refrain from commenting on probe over Mizuho Sec

Mizuho Securities Under Investigation for Suspected Insider Trading

Mizuho Financial Group Inc.'s brokerage unit, Mizuho Securities, confirmed it is under investigation by Japan's Securities and Exchange Surveillance Commission for suspected insider trading involving employees in its investment banking division. The Nikkei newspaper first reported the probe, though neither the company nor the SESC has provided details about the alleged misconduct or the specific individuals involved according to reports. Mizuho stated it is "fully cooperating" with the investigation but declined to comment further, citing the ongoing nature of the probe. A SESC representative also refused to comment as reported.

The development adds to a series of insider trading scandals in Japan's financial sector in recent years. These include the arrest of a former Mita Securities executive in February 2026 over a Nidec Corp. tender offer, the dismissal of a Sumitomo Mitsui Trust manager in November 2024, and a complaint filed against a former Tokyo Stock Exchange employee in December 2024 according to Bloomberg. Such cases have raised concerns about regulatory oversight and market integrity, particularly as Japan's stock market approaches record levels amid a surge in M&A activity and equity offerings as noted by Bloomberg.

Mizuho, Japan's third-largest financial group, has faced a 5.3% decline in its shares since the probe's disclosure—the largest drop since April 2026—amid broader weakness in the banking sector. Analysts attribute the decline to heightened regulatory scrutiny and economic uncertainty, which have dampened expectations for Bank of Japan rate hikes.

The investigation underscores persistent challenges in curbing unethical practices in Japan's financial industry. Regulators have intensified efforts since a 2012 scandal involving information leaks from major brokerages, yet recurring cases suggest systemic vulnerabilities remain. As the probe unfolds, stakeholders will closely monitor Mizuho's response and potential reforms to restore investor confidence.

Bloomberg: Bloomberg, Securities Docket: Securities Docket, Japan Times: Japan Times, Nikkei Asia: Nikkei Asia, Bloomberg: Bloomberg (repeated).