Comments on: Defending the financial system against yakuza infiltration

By: Peter

Peter — Sun, 28 Jun 2009 15:48:38 +0000

There are a fair share of ‘organized crime-related specialists’ within the institutions themselves, from what I hear. That together with traders trying to screw the system with bogus trades makes being a compliance officer a particularly onerous duty.

If you work on a trading desk, keep an eye on the guy who is only out on vacation when the outside inspectors come to town.

By: Roy Berman

Roy Berman — Sun, 28 Jun 2009 06:48:12 +0000

I’ve seen posters in the Post Office and other retail banks warning in giant type that it’s a CRIME to sell your bank account to criminals for money-laundering.

By: Adamu

Adamu — Sat, 27 Jun 2009 23:28:19 +0000

Iin general banks that don’t act decisively to avoid being used for money laundering WILL be used that way. The passive stance of banks who apparently have turned a blind eye to this activity for years has started to bite them in the ass.

The common methods used by the gangs is kind of interesting:

– NHK recently did a special on efforts to combay money laundering where they showed how common it is for regular people to “sell” their accounts online to unknown elements who then use the honest accounts to make overseas transfers.
– Since there has historically been little sharing of information among banks (not sure if this has improved), NHK mentioned a Nigerian who got caught opening dozens of accounts all over the country and making as many wire transfers as possible before anyone found out.

Since the FSA seems to really enjoy handing out business suspensions in recent years, the domestic banks have invested heavily in programs that monitor their entire system for suspicious activity, similar to what US banks have installed.

What’s amazing is that the US banks are so eager to convince the government NOT to regulate that they tend to keep their houses in order; it’s usually Japanese domestic banks that rely on direct government orders to do the right thing.

By: Gen Kanai

Gen Kanai — Sat, 27 Jun 2009 22:40:49 +0000

“many of their Japanese employees see their interests as more aligned with their customers than with their employer.”

And yet aligning with your customer is supposed to be the way to be most successful, as long as your customer is not the mafia or other money-laundering organizations.

By: Mulboyne

Mulboyne — Sat, 27 Jun 2009 06:45:18 +0000

Citibank suffers from a problem that afflicts many overseas operations in Japan. In a nutshell, many of their Japanese employees see their interests as more aligned with their customers than with their employer. Once your staff start to go off-piste, you find yourself in trouble. Citibank has failed to get to grips with this issue over many years which points to quite a serious management failure.

Interestingly, when there’s a compliance failure in a Japanese corporation it is often the opposite problem of staff putting what they see as the interests of the company before the interests of customers, regulators, society etc.