Mitsubishi UFJ Morgan Stanley Securities (MUMSS) was absent from at least eight yen bond deals of the kind the firm would usually participate in on Monday as fallout spreads amid allegations of financial misconduct.
The Development Bank of Japan, the Japan International Cooperation Agency and NEC allowed MUMSS to refrain from arranging planned bond transactions. MUMSS was also not listed as an underwriter in five bond mandates announced Monday, including those of Chugoku Electric Power and Hokuriku Electric Power, according to statements from underwriters.
Scandals have led to bond insurers losing deals in Japan in the past. SMBC Nikko Securities, the brokerage unit of Sumitomo Mitsui Financial Group, also lost revenue in 2022 after a market manipulation scandal. MUMSS, part of Mitsubishi UFJ Financial Group, is typically one of the most active arrangers of yen corporate bonds, ranking third in the fiscal year ended March 31, data compiled by Bloomberg show.
Before the scandal broke in early June, MUMSS was an underwriter for 41 Japanese-currency corporate bonds out of 63 credited deals in May, according to data compiled by Bloomberg.
A spokesperson for Mitsubishi UFJ Morgan Stanley declined to comment on specific deals.
MUMSS lost more debt settlement options on Monday after the Securities and Exchange Surveillance Commission said on Friday that Mitsubishi UFJ Financial Group repeatedly breached the confidentiality of its customers by breaching the firewalls between the bank’s units.
The SESC called for the group to be punished, saying MUFG Bank, Morgan Stanley MUFG Securities and MUMSS exchanged information at least 10 times to win business.
Last week, Kanagawa Prefecture, Japan Housing Finance Agency and Aeon dropped the brokerage from arranging bond transactions.
