Japanese brokers suspended over racketeering scandal

Japan's Ministry of Finance has suspended Nikko Securities and Daiwa Securities from dealing in equities and government bonds.

The action is punishment for illegal trading aimed at generating profits to pay off racketeers.

Nikko has been suspended from dealing in equities and public sector bonds for 10 weeks from December 25 until March 4.

The ministry also suspended the company from broking securities at its Ginza and Shinmaru Building branches in central Tokyo.

Daiwa has been suspended from dealing in equities and public sector bonds for four months from December 25 until April 24.

Additionally, Daiwa is suspended from broking securities at its Tokyo head office investment consulting department.

Finance minister Hiroshi Mitsuzuka said: "I strongly expect both companies to regret deeply their involvement in this matter.

"I also expect them to make efforts to recover credibility."

The two securities houses have been ordered to submit reports by January 23 clarifying their plans to improve their operations.

The ministry said they had to explain their involvement in illegal trading.

In addition, the government ordered the companies to strengthen their systems of internal control.