Japan's Securities and Exchange Surveillance Commission is seeking penalties against a bank and two brokerages of Mitsubishi UFJ Financial Group. They're alleged to have illegally shared information about clients.
The securities watchdog has advised the Financial Services Agency to issue administrative punishment to MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities.
Banks and securities firms, even within the same group, are restricted by law from sharing information about client companies to protect their interests.
The commission says the three firms violated this so-called "firewall" regulation.
It says the firms inappropriately shared non-public information about clients' management strategies 13 times between 2021 and 2023.
The commission says the bank also shared information with a brokerage about a company's acquisition, despite the existence of a signed non-disclosure agreement.
The commission also says the management system of the three companies is inappropriate.
It says the firms violated legislation, including a law governing financial product trading.