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Can’t afford to do background checks on your clients? Fuhgettaboutit

September 28, 2007
By Ken Worsley


The top headline on the Yomiuri’s English site today was Brokerages aim to cut ties with gangs, which may or may not sound more sensationalist than it really is. At any rate, it is a tad misleading. The brokers themselves are not behind this effort, as the article’s first sentence points out: The “Japan Securities Dealers Association (JSDA) will prohibit securities firms from letting gang members open brokerage accounts and punish violators of the rule.”

We then learn that a mechanism for identifying accounts that should not be allowed is hoped to be in place “as early as fiscal 2008.”

The JSDA has no formal rule banning its members from dealing with known criminal groups.

“Keep moving, nothing to see here…”

Filed Under Business, Equity Markets, Stocks, White Collar Crime 

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Comments

One Response to “Can’t afford to do background checks on your clients? Fuhgettaboutit”

  1. Garrett on September 30th, 2007 10:28 pm

    I don’t know how seriously to take this.

    After this revelation, JSDA’s board of governors decided to ban members, in principle, from doing business with gangs.

    Sounds like empty words to me. How hard is it to at least say, firmly, in writing, that your borkerage or the JSDA , is not going to allow itself to be a tool of gangsters?

    Besides, do “know your customer” banking regulations apply only to retail banks and not to brokerages?

    The incident led police to suspect that gangs still trade securities and stocks to raise funds.

    Hmm. . . Ya think?

    This is one of those things that makes me think there’s no good reason that gangsters should be so far ahead of the police and that there’s no accounting for such apparent incompetence. There’s just no way that the police, if they’re really trying, could have ever thought gang involvement in the stok market was not a reality.

    Yes, I mean that to imply what it does.

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