MUFG Bank employee suspected of leaking takeover bids; family members may have made millions of yen from deals

According to sources, an employee of MUFG Bank is suspected of leaking takeover bids and other information about the bank’s client companies to family members before the information was made public.

The relatives are suspected of having traded in shares of the client companies and made millions of yen in profits. The Securities and Exchange Surveillance Commission (SESC) learned of the transactions and searched the bank employee’s home on suspicion of violating the Financial Instruments and Exchange Law.

The law prohibits anyone who becomes aware of a “material fact,” such as a takeover bid or a merger or acquisition involving a publicly traded company as part of their business, from trading in stock before the fact is announced, or from leaking information to others for their own benefit.

According to the sources, the bank employee the SESC is investigating worked at the bank’s headquarters and was once transferred to an affiliated securities firm.

The employee is suspected of having obtained undisclosed information, such as about takeover bids by the bank’s client companies and its affiliated securities business. The employee is suspected of having leaked information to family members on multiple occasions through 2023.

The SESC searched the bank employee’s home around May and also investigated the bank and its affiliated securities firm.

The watchdog plans to question the bank employee’s relatives about how they communicated with the employee and how the relatives traded their stocks. The employee has reportedly denied involvement in the alleged fraud to the watchdog.

“It is true that an employee of MUFG Bank is being investigated by the watchdog. If the leak occurred, it is truly regrettable. We intend to fully cooperate with the investigation,” said an official at Mitsubishi UFJ Financial Group Inc. (MUFG), the bank’s parent company.

The bank’s internal rules prohibit employees from passing on confidential information about client companies to outside parties, including family members.

Earlier, it was revealed that MUFG Bank had shared customer data with affiliated securities firms without permission, in violation of so-called firewall regulations. Another bank employee was found to have used customer data to trade stocks for personal gain and was fired.

After receiving notice from the SESC, the Financial Services Agency issued a business improvement order on the bank and its two affiliated securities companies under the Banking Act on June 24.

According to the sources, the SESC became aware of the alleged leaks during its investigation.