Japanese prosecutors investigating SMBC Nikko after management arrests - Asahi

FILE PHOTO: SMBC Nikko Securities
FILE PHOTO: SMBC Nikko Securities' logo is pictured at its headquarters in Tokyo, Japan December 5, 2017. Picture taken December 5, 2017. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) - Tokyo prosecutors are investigating SMBC Nikko Securities Inc following the arrest of four executives on accusations of market manipulation, the Asahi Newspaper reported on Tuesday.

The prosecutors are trying to determine if there is a case against SMBC Nikko's management for faulty supervision. Four executives, including a senior managing executive officer, were arrested on Friday.

The securities company is the brokerage unit of Sumitomo Mitsui Financial Group.

A spokesperson for SMBC Nikko did not have an immediate comment on the story but referred to comments made by the firm's chief executive on the weekend.

SMBC Nikko said on Saturday it had set up an investigation committee following the arrests. At issue are "block offers", after-hours transactions SMBC Nikko conducted for investors selling stocks of five companies in large volumes.

SMBC Nikko CEO Yuichiro Kondo said at press briefing then the brokerage has suspended block offer transactions, which account for about 5% of its annual trading revenue.

(Reporting by Mariko Katsumura; Editing by Sam Holmes)

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