TOKYO: An American former executive of a large Japanese brokerage who has been criminally charged in Japan asked a court to rule him innocent, and said the outcome of his trial will have bearings on the country’s standing as an international financial hub.
"Unfounded and speculative conclusions drawn by the prosecutors in this case have led to widespread concerns about the legal risk of working in Japan,” Trevor Hill, the former head of equity at SMBC Nikko Securities Inc., said in the Tokyo District Court on Thursday (March 27).
His statement, part of the defence’s closing arguments, came weeks after prosecutors called on the judge to slap multi-year prison terms on Hill and other defendants in relation to their alleged wrongdoings.
Hill was arrested in 2022 and subsequently charged with manipulating share prices, along with several former employees of the firm. He and most of the accused individuals have pleaded not guilty and denied wrongdoing.
"An innocent verdict will help reestablish the momentum of attracting top global talent to this country and ensure that Japan becomes a regional and global hub of society-building business success,” Hill said. The court will deliver a ruling on July 22.
The case has drawn attention to the high stakes facing foreign professionals working in Japan. The country’s justice system has faced criticism for its conviction rate of more than 99 per cent, and trials are often viewed as practically forgone conclusions.
Hill’s indictment was particularly notable as he was one of a handful of foreign executives who had climbed to the top management echelons in a major Japanese brokerage. Hill was previously head of equities at UBS before he was hired by the brokerage arm of Japan’s second largest banking group in 2014.
In 2023, SMBC Nikko and one of its former executives, Teruya Sugino, were found guilty of market manipulation. The firm was ordered to forfeit ¥4.47 billion (US$29.6 million) in earnings and fined ¥700 million (US$4.64 million), while Sugino, an ex-manager, was sentenced to one year and six months of imprisonment, suspended for three years. Both had admitted to propping up the prices of shares before they were sold in what’s known as a block offer, in violation of Japan’s financial laws.
Hill said prosecutors are attacking what were "super clean” activities. That has caused many traders to think that "buying Japanese stocks on a large down day is too dangerous from a legal risk perspective,” he said. Global institutional traders are "scared” to purchase Japanese stocks until after they go up again, he added.
Hill also said he was committed to compliance, and that it was one reason he liked to hire golfers. Golf is "the ultimate strong compliance-mind sport,” he said. "When you make a penalty, you call the penalty on yourself. In our equity business, thatʼs exactly what we always did.” - Bloomberg
