What are your best “Japanese mistake” stories? I’ll start

In a couple weeks I am supposed to give a presentation (in Japanese) for my company’s family day. The topic is “common English mistakes by Japanese people.” I didn’t decide the theme, but I am hoping to use the opportunity to spread the message that speaking “wrong” English should be welcomed as long as you are at least communicating and using what you know.

And since I don’t think it’s fair to focus only on Japanese people’s English mistakes, to help make my point I am including the following anecdote about my own linguistic history:

About a month into my time as an exchange student in high school (my first-ever visit to Japan), I started staying with host parents who loved to feed me. Very, very nice and welcoming people. One time they served me hot cocoa, and I told them I liked it. Big mistake, because for the next two weeks they gave me the same hot cocoa with dinner every single night.

I was starting to get pretty sick of it, but I wanted to be polite and as such didn’t want to say no without doing so properly in Japanese. So I looked up how to say “I am getting tired of X” in the dictionary and went to my host mother and told her:

ココア、飽きたです (broken Japanese for, “I sick of cocoa”)

Her reaction? She looked shocked, started to cry, and asked why I would say such a thing. She then got her husband, and he demanded an explanation. I was starting to get nervous at this point, so I just repeated ココア、飽きたです thinking they’d get it this time. They didn’t and just seemed to get even angrier and more hurt…

Sweating now, I tried a few more times with different, untested sentence structures, mustering all my training from stateside Japanese classes. (ココアおいしいけど飽きたです?). With each utterance, they would look at me curiously and then start talking among themselves in words I couldn’t understand.

Finally, it dawned on me – ココア、飽きたです sounds a lot like ここは、飽きたです (I sick of this place). So I finally found the bag of cocoa and started pointing to it, saying  ココア ココア!!

Once they finally got it everything settled down. But for a moment I thought I might be in some serious trouble for making a cultural faux pas. I had heard how much Japanese value social protocol, so until I realized the mistake it seemed like saying no to cocoa was a really big deal. I still feel bad about making my host mother cry.

***

Have any of you had similar linguistic misadventures? Please let me know in the comments section. Note that if your story is really good I might have to steal it for my presentation!

Japanese “Western” style weddings are awesome

I recently saw someone tweet this:

The Japanese are brilliant at creating unnecessary rules and rituals for adopted western ceremonies. Particularly weddings. Urgh.

Many apologies, Zee-chan, but your statement has inspired me to say something about Japanese weddings. Essentially, that thing is this – I understand the frustration, but for all the ritual and pomp and circumstance, Japanese wedding ceremonies serve a worthy purpose that deserves respect. In fact, the rigidness and ritualistic aspects are kind of the whole point!

Again, I don’t want to single out Zee-chan. I don’t know her and it’s just one tweet, so I have no idea what she is thinking in detail. She just got me thinking about the topic.

But I will say this – I personally have long had complaints about the typical Japanese “western” style wedding, and I know that many other Westerner expats have them too. They tend to consist of sentiments like:

  • Japanese Western weddings are phony-seeming because they are held in a Christian chapel even though the couples and families are rarely practicing Christians
  • It’s weird that they hire white people to act as fake priests
  • They are unnecessarily expensive
  • The cash gifts requested of guests are too high
  • Rules for how to hand out gifts, greet the bride and groom, etc. are too rigid

Many of those criticisms are all well and good, but in general I want to just tell everyone to give Japanese weddings a break! People all over the world have a need for ceremony, and it isn’t fair for outsiders to be dismissive of the necessary rituals for marriage.

For my wedding to Mrs. Adamu way back in 2007, we went through a very conventional wedding planner, but insisted on doing things very simply and in our own way. We had no “ceremony” to speak of since we are not religious. Instead, we skipped directly to the reception and invited only close family and friends to a restaurant of our choosing. We asked one of our close friends to em-cee, created the invitations and audio-visual content ourselves (an MP3 mix and PowerPoint presentations!)

We did this first and foremost because we wanted things to be more intimate and customized to our style, in order to make it more memorable. But another reason we insisted on doing it this way was because we hated the Japanese “Western” style weddings so much and didn’t want to do full Japanese-style either. We openly thought the Western ones were stupid, especially the fake priest thing, and even tried to convince some of Shoko’s friends of this (unsuccessfully).

Well, we had the ceremony and it was a success beyond our expectations. We dressed in kimonos, Mrs. Adamu’s friends performed for us at the after-party, and we were able to bring the two families together (my immediate family flew into Tokyo for the occasion).

We were so proud of how it turned out, and we look back at that day very fondly. But after everything went down, it dawned on me – in terms of the benefits, our wedding was not that different from other Japanese couples who went the more traditional route. Here are some of the good things about having a “proper” wedding:

  • It lets the people in each circle (family, friends, coworkers, bosses) know in a very public way that the two of you are coming together, and it gives the people a chance to meet the other person as well as the other side’s family members
  • More critically, it is a public meeting of the two families to show (and usually give a speech explicitly stating) that they are in favor of the union
  • It gives everyone a chance to celebrate the union and in a way say goodbye to the single person they knew – the speeches and performances by friends are part of this
  • For the couple, it is their chance to know that they are accepted, see that people are happy and celebrating, and thus feel like a real married couple
  • Doing all this formally and in public makes it all official – this was hard for me to appreciate before having gone through it, but if you’re young and not married this is a bigger deal than you might think. For example, my father died a while after this, and for whatever reason I feel better knowing he was able to see me get married.
  • Oftentimes, the gifts collected exceed the cost of the wedding itself, and thus help fund the couple’s new start together
  • It is the bride’s day to live her dream, dress up nicely, and be the complete center of attention on one very special day.
  • And of course, the proceedings are documented on video and in thousands of pictures, to share with the people who couldn’t attend and to look back on years later.

These will definitely vary for each couple/family (and of course it’s somewhat idealized), but I think it’s a decent approximation.

And for all this, it doesn’t really matter what specific form the ritual takes, as long as people recognize it as an official and real wedding ceremony. So if it takes hiring a random white person, signing a fake contract, or whatever, so be it.

It might go without saying, but a wedding day isn’t all about the couple getting married – it also has to (at least mostly) meet the expectations of the guests, especially the parents. And in the case of many Japanese people, that means checking off all the boxes on the “wedding ceremony” order form. It might be expensive, gaudy, “fake,” etc, but it fulfills a very real social need.

This is mostly my own tale of coming to my senses and growing up about the importance of the wedding ceremony. So I am not sure how much this applies to other people, but at any rate I wanted to get this story off my chest.

Why raising the consumption tax is a good idea AND good politics

The following is a lightly edited version of my e-mail reply to a friend who asked about the ongoing fight over passing a hike to the consumption tax. As of this writing the bill has passed the lower house but has still not become law. See Japan Real Time for a good breakdown of recent events:

The consumption tax was definitely too low for a country with such generous welfare benefits, so raising it only makes all the sense in the world. I almost wish they had put in a delay mechanism in case the economy is still in bad shape in 2 years, but hopefully that won’t be the case.

Fiscally, I think it is a drop in the bucket, and the short term economic impact is definitely not great. That is why there is such a strong knee-jerk negative reaction among the public. They either run or know people who run small businesses that will get hurt, but more importantly it’s one of the few policies that stares average people in the face every day and is easy to understand. Everything you pay for will get more expensive.

But at the same time it’s vital to get the house in order so to speak, or else Japan really is in for a hard landing. The social programs that Japan has are great and they need to be maintained. So they need to be funded in a way that’s not too onerous, and this seems like as good a way as any to me.

I have basically come to the conclusion that inflation is unlikely in Japan over the long term because there isn’t a fundamental basis for it. People are getting older fast and are just going to spend less. And productivity gains aren’t going to be fast enough to make up for that (economics isn’t my strong suit… but isn’t it the case that inflation is at least supposed to track economic cycles?) Japan isn’t going to necessarily have another growth boom, but what it can do is enjoy a comfortable and proud status as a rich nation. That is, they should be able to if people in their prime now can actually feel some security and expect a reasonable retirement not too different from what their parents had.

In terms of the political situation, there are a lot of people saying that Ozawa “won” but I don’t really see it that way. He didn’t stop Noda from doing what he wanted to do – there has effectively been a Grand Coalition in place since Noda came to power (note how close to unanimous the jail-for-download law was, or the postal reform bill, or take your pick) and for all the blustering among the parties they are pretty much united on a lot of policy measures because they are a) consensus among the Serious People muckimucks like the finance ministry and media opinion makers, and b) the subject of gaiatsu (I believe the IMF has been dogging Japan to raise the consumption tax).

And although Ozawa technically has the power to basically an early election through defecting, he is too afraid to do it because he knows that his clique is even more exposed to getting voted out than the others because it contains so many first-termers. It seems pretty shrewd for Noda to NOT punish the defectors in that case because it prevents the election from happening and lets the de facto grand coalition continue with him running the show.

If there is an election the DPJ will lose, the LDP will win (though maybe not get an outright lower house majority), Komeito will maintain, and Hashimoto’s party might make a serious splash, though Hashimoto himself has said he won’t run. So in that context I think all the established parties, especially the DPJ, have an incentive to delay an election as long as possible. Once Hashimoto has his foot in the door of national politics life won’t be the same. Every little thing will be a fight that can’t be worked out by getting drunk together at a ryotei.

Make no mistake, though, this is a big deal. This type of potential split in the DPJ was months in the making, maybe even years because Kan might have pushed for the tax hike had there been no earthquake (remember how he for whatever reason ran on that issue in the Upper House elections?).

And there is always the need to point out that this agenda of raising the tax was pushed by the finance ministry. Politicians in general are empty shells with voting power, and they need to get pushed in a certain direction by the people who they think will help them keep or increase that power. This time it was the ministry of finance because it is a permanent bureaucracy that has a political agenda that’s informed by its mission as the steward of the Japanese government’s finances.

That isn’t necessarily a bad thing because if there is one thing that the DPJ coming to power has taught me is that it’s dangerous to allow people with zero expertise being responsible for governing convince themselves that they know what’s best for the country. It feels like all they are good for is posturing and fundraising. The DPJ made the critical mistake of making enemies of the bureaucrats instead of cultivating them and influencing them in the subtle, glad-handing way the LDP mastered. Or at least they could have brought in people with talent and real ideas.

Re-importing kabuki

From a recent NYT article on how globalized Japanese people supposedly have trouble finding jobs in Japan:

“Shukatsu” refers to the system in which Japanese companies typically hire the bulk of their workers straight from college and expect them to stay until retirement. Not getting a job upon graduation is seen as a potential career killer.

So competition is fierce. In the last three years, the percentage of new graduates in Japan who found work was the lowest since the government started collecting comparable data in 1996. As of Feb. 1, with two months left in the recruiting season, a fifth of students in their final year at college had yet to find jobs.

“Shukatsu is like Kabuki theater,” said Takayuki Matsumoto, an Osaka-based career consultant. “It’s difficult when you don’t fit the template.”

His advice to returnees: don’t be too assertive or ask too many questions.

Something tells me that young people who study in the US and then spend most of their job hunt trying to land work with Japanese companies might have unrealistic expectations of potential employers. They might not realize that US employers also have similarly kabuki-like expectations of potential recruits. In a lot of ways, the experience of working at your first company might not be that different.

I feel like I must have read this same article like 5 times over the last decade, whether in the form of a primer in Japanese business practices or a feature like this one. The tone of this piece is at odds with my experience working at a US law firm and two Japanese companies so far. Internationally minded people with the right attitude can find a lot of success in Japan. There is such a limited population of truly proficient English speakers that opportunities abound.

I think there can definitely be a mismatch between employer and employee expectations, but overall I think Japanese firms are desperate for talent that’s proficient both with English and dealing with Western culture. It’s mostly sucked up by the foreign firms operating here, so they are hurting for it. That is to say, there may well be many companies that fit the stereotype outlined in the article, but I think there are plenty of others that will welcome the type of talent they describe. Instead of whining to the New York Times, you guys should have spent that time submitting a few more job applications.

Does your experience jibe with mine? Let me know in the comments.

(Thanks to regular reader Diana for sending this in!)

Read up on the upcoming changes to immigration policy – pretty much all positive!

Happy foreigners love the new system!

Starting next month (July 9), the immigration authorities are going to implement a series of changes to the rules for foreigners in the country. The biggest is probably replacing the foreigner registration card (gaikokujin torokusho) with a residency card (在留カード). It’s more or less the same, but it will now be administered directly by immigration, not the local authorities.

There are a lot of other changes as well, so it would probably be a good idea to sit down for maybe an hour and familiarize yourself with them. The government’s handy website can be found here for Japanese and here for English.

All in all, these represent some real benefits for expats, so I think the authorities deserve a pat on the back on this one. So far my personal experience with immigration has been very positive, and it looks like my warm feelings will only continue. Here are some of the new rules that caught my eye:

  • The general term for a medium-term visa will be extended from 3 to 5 years.
  • A “deemed” re-entry system will allow anyone on medium-term or permanent resident visa to leave the country and return without a special application or fee, provided they come back within one year. Longer periods out of the country will still follow the old system of filing an application and paying a fee for a temporary re-entry permit.
  • Changes of address will still go through local government offices the same as Japanese people, but changes to marital and employment status, etc. will need to be reported to immigration. That could be a pain in the butt, but apparently they plan to allow you to report changes by mail, which would be a huge improvement.
  • The new card won’t include personal information such as employer or school name on the card. Instead that information will be stored in an on-board chip.
  • Violations of the new system are now subject to penalties and fines!
  • People whose old gaijin cards are still valid in July don’t need to get the new cards right away. You will have up to three years to get the new one.
  • Foreigners will be added to the juminhyo system instead of being part of a separate registry. I am not sure exactly why this is a big deal, but presumably not maintaining a totally separate database will save the government some money.

UPDATE: Another big benefit is that for newcomers, residency cards will be issued upon entry, so you will no longer need to show up at city hall to register and wait for the card to be issued. This along with some other services is only available at major airports. You are still required to go to the local office to “notify” them of your presence… But if I’m not mistaken this is functionally not that different from what Japanese people have to do when they move.

Did I miss anything big? Please let me know in the comments, and be sure to read up on the new system!

Best ways to cope with routine gaijin questions? A reaction to Debito

Debito’s latest creation is a column about “microaggression,” which is his new term for the routine, repetitive questions and lines of conversation that Japanese people commonly have with white Westerners (“You can use chopsticks?” “Can you eat natto?” etc). He says they add up to a form of soft discrimination. It’s one of his better thought-out and organized pieces in a while, so I heartily recommend reading it.

I will admit at first the column touched a nerve because I easily tire of hearing these questions and have many times cut conversations short rather than continue (partly because my Japanese sucks). But while I agree with the basic framework of the idea–that people treat gaijin this way because they are different–I ultimately don’t think it’s worth calling that out and out discrimination and prejudice.

He goes into lots of details, and if you want to get into the finer points of his column in the comments, I will be there with you. But for now I just want to point out my biggest issue.

Boring, repetitive conversations are had all over the world. It just so happens that when Japanese people see a Western face, it calls up memories of learning English in school, the images on TV, and the experiences they or their friends have had with foreigners in the past.  It’s all completely natural and utterly mundane. A shout-out and a thank-you go to those rare people who can break this mold and have lively and fun conversations.

Rather than a small form of “aggression,” in my experience people who do this are almost always just sticking to the script of safe, polite conversation. Most people are not great conversationalists, so they gravitate to what’s easy. Doctors always hear the same questions about their job, so does that mean they’re being discriminated against?

I am totally on Debito’s team when it comes to being pissed off at ignorant prejudiced people. It’s just that while the ignoramuses do engage in the routine rote questions, doing so isn’t a capital offense, socially speaking. You will screen out a lot of perfectly decent people if you denounce everyone who ever mentioned your chopstick skills.  For one thing, talking about food is probably the best ice-breaker for intercultural encounters, so it’s kind of unfair to try and rule that out!

In the column Debito mentions “coping skills” like it’s a dirty word. But coping skills are absolutely essential for living in Japan, and they don’t need to involve trying to change the whole society. There might be a time and place to discuss with Japanese people the absurd repetitiveness of some of these conversations, but it’s probably not worth “resisting” someone you are meeting for the first time.

What are some go-to ways to cope with these situations? As I said I am not good at this, so my most common method for complete strangers might be to politely answer the questions and then clam up, thinking, Hurry up and finish cutting my hair! But when I am feeling festive, I’ll sometimes turn the question around, or even better– change the subject! People usually move on. Ken on Twitter had a good one: “Best part of being ambidextrous is as soon as I get [the chopstick] compliment I issue the challenge to use them lefty.” Really, this is an area where I’ve fallen into a pretty unfriendly routine, so being better able to deal with it would probably brighten these people’s days, not to mention my own.

Update: While Mr. Arudo’s column was worth our unqualified attention this time, our “no Debito” policy lives on in the comments section – our hope against hope is that you try to avoid talking about the man himself and his approach and blahblahblah

Revenge of the nerds: Konkatsu Killer Kanae sentenced to hang

Kanae Kojima, an alleged black widow murderer, was convicted of murdering three former boyfriends and sentenced to death by hanging by a panel of professional and lay judges. I have watched the story with some interest due to her ultra-creepy trawling for victims on Internet dating sites. Her MO was to drain the men of cash and then drop them when they were of no use to her. The three she was convicted of killing were just the deaths they had the most evidence for.

I say this is “revenge of the nerds” because she would often prey on some of the more timid members of the male public, including one awkward-looking man who had a blog for his plastic models. I am a little concerned that she was convicted on essentially all circumstantial evidence, but it does seem to be a win in the name of justice for the lovelorn and downtrodden.

My Japanese sucks and always will

Not as good as this guy’s

Just want to get something off my chest. I’ve been studying Japanese for almost 15 years, spent two of them studying abroad, lived in Tokyo for five years now, passed the JLPT 1 and the Securities Representative exam in Japanese, worked as a Japanese-English translator for around 7 years, and on and on. I’ve done a lot of stuff that would seemingly require near-native fluency, and yet…

My Japanese still sucks. I feel like no matter how much I study or live in the country I am always going to have a rough accent, a low working vocabulary, and generally limited fluency. My reading will always be much much slower than a native, and I will forever be looking up kanji on my iPhone even to write my own address half the time. My wife will be afraid to let me go to the doctor alone lest I misunderstand some important detail. I’ll never feel comfortable speaking in public or leading a group conversation among natives. If someone doesn’t feel like being patient with me there’s not a whole lot I can do to take control of the situation.

I feel like I have improved a lot and developed a pretty good working use of the language, but on an objective level it’s just terrible. I’d like to go around thinking I have really achieved something by learning another language and making a career of it, but I need to be honest.

In the US there is a very simple standard for English fluency – either native or foreign. You don’t get any prizes for having 50% fluent English or even 90%. But of course here, Japanese people tend to be overflowing with praise for a Westerner who speaks the language. They make it sound like it’s such an amazing achievement. But anyone who grows up here will learn Japanese – it’s just a way for people to communicate. I don’t think knowing it means you deserve any special credit. I guess I should be grateful that the bar is so low and so many people are willing to be patient with me.

I can only speak for myself, but I get the feeling that a good deal of the long-term Western residents are like me. They’ve developed a good working fluency but will probably never really reach native level. I think that’s great and worthy in its way, but for me I don’t want to lose sight of reality.

There are ways that I could improve, maybe, and I do want to get better. I want to just live a normal life without worrying about the language barrier. It’s demoralizing to stutter and fumble words at my job or even just trying to ask a store clerk something. Having better Japanese and the social skills to use it (a big one here) would make it much easier to disarm situations where people are uneasy about dealing with a foreigner. I have definitely not been in the habit of actively trying to improve my Japanese for quite a while now – at this point in my life (almost 30) my priorities are work and spending time with Mrs. Adamu. Spending extra free time writing kanji is not my idea of fun anymore.

People laughed Debito’s column about not having male Japanese friends, but I actually kind of identified with it to an extent. I don’t hang out with many Japanese people, and next to zero men. Unlike Debito, however, I don’t really blame Japanese people for not being sophisticated enough to understand me. I instead put most of it down to the language/cultural barrier and my own social awkwardness. There are lots and lots of people with similar backgrounds who have successfully integrated, either going native or on some other terms, and they can just make it work in a way that I haven’t been able to.

Maybe what’s made things worse is that my Japanese has improved to a level where I know what it means to speak at a native level and the difference when someone falls short. At the risk of comparing myself to people with real problems, it’s like a disabled person who knows what it’s like to walk but just can’t make his body do what his brain is telling it.

Anyway that’s something I have been wanting to post on Mutant Frog for a while now because I don’t want to put out this image like my Japanese is so amazingly awesome when it’s not. That’s definitely not how I used to feel (I think I have written that I “get” Japan better than other people on more than one occasion) but I am way overdue for some humility.

AIJ – mini-Madoff or yakuza slush fund? It’s too early to tell

(Update: Jake Adelstein has left a response in our comments section)

Friday morning the news broke that Japanese regulators shut down AIJ Investment Advisors, a small investment management firm, because its 183 billion yen in funds under management had mostly gone missing. The company specialized in managing pensions for smaller companies. It seems likely that a massive fraud has taken place.

Scandals like these are not obscure, victimless crimes – they directly affect people’s lives. For instance, semiconductor equipment maker Advantest apparently had 8% of its pension assets invested with the firm. These funds are very unlikely to be recovered at this point. That’s 8% less the firm has to pay its workers post-retirement, which it will have to make up for somewhere. The unwitting employees of AIJ will no doubt lose their jobs as well. A company the size of Advantest might be big enough to weather a loss like that but 100+ other clients that were wooed by the attractive returns might not be so fortunate. Layoffs, bankruptcies, ruined lives, misery all around.

The fund reported consistent returns regardless of market conditions, achieved with exotic financial instruments–classic signs of financial fraud that corporate pension managers should have seen coming a mile away. It’s too early to know exactly what happened, though. According to the WSJ, the ratings agency R&I called attention to the suspiciously favorable returns in 2009.

Too early to call “yakuza”

Even though the facts have yet to come out, that hasn’t stopped Jake Adelstein, among others, from promoting a possible yakuza connection. That’s understandable since he bases his media career around being the West’s yakuza expert. However, I take issue with him coming out so early in favor of an organized crime angle. He doesn’t know any better than the rest of us, at least judging from the justifications he has trotted out so far.

He argued in favor of a yakuza connection in the Olympus scandal not too long ago, and the New York Times ran a report that the police were looking into yakuza involvement. However, the independent investigative committee found no evidence of yakuza and I have not seen any major refutation on that point.

Despite seemingly getting it wrong on Olympus, Jake has again taken to Twitter to play up a connection in the AIJ scandal. As with Olympus, the New York Times has run an article that echoes and bolsters his claims. The feed and the article make lots of claims that I will paraphrase here:

  • AIJ is a Yamaguchi-gumi front (Jake)
  • This is true because one of the board members (not the head) was convicted of paying protection money to a corporate extortionist (sokaiya). And once someone has paid millions in protection money and gotten caught, that means they will turn around and steal billions (I am assuming because the yakuza tells them to). (Jake)
  • The head of the firm is also ex-Nomura (NYT)
  • The DPJ-led government turns a blind eye to financial fraud because the former FSA minister may have accepted yakuza donations at some point. (Jake)
  • The Nomura connection and the dates when AIJ and another firm received approval to offer financial services means the AIJ scandal “shares many characteristics with the Olympus scheme” (NYT)
  • Jake sent an email to a friend explaining his suspicions about AIJ in 2008. He says that his sources told him AIJ manages the Yamaguchi-gumi’s pensions.

I am ready to be wrong, but at this point I am not convinced. These unconfirmed claims, appeals to authority, and guilt-by-association tactics do not amount to actual evidence to justify labeling this a yakuza crime. Yet, anyway.

It may well be that the Yamaguchi-gumi raided AIJ and took all the money, or demanded favorable treatment as a customer. But a serious and contemptuous crime has apparently taken place even without a yakuza connection, so there’s no need to rush to apply a label, in my opinion. Jake and Hiroko Tabuchi of the New York Times, I beg you to please rein in your speculation until we have more facts.

Actual damage possibly smaller than 183 billion yen

It’s also worth noting that the 183 billion yen number includes potentially phony returns, so if the entire cumulative return of 245% is phony but the cash remained, that would leave AIJ with 53 billion in cash. That would leave “most of” the money missing even with most of the principal intact. That’s still a lot it’s indeed gone, but we don’t even know that much right now. And if the company has only been lying about returns that means they have likely been fraudulently collecting return-based fees.

It’s my understanding that investment managers are required to keep funds in segregated accounts at trust banks, to avoid the easy temptation of embezzlement. For example, if I buy a mutual fund, the fund manager doesn’t get to touch my money at all (unless I am totally naive). It goes into a trust, and the manager simply gives instructions on which securities to purchase based on the contract. AIJ was a “discretionary” manager, meaning that the managers had free rein over (but not direct access to) the funds as long as the action fit a pre-determined investment policy. Of course that assumes AIJ was following procedures when collecting funds. If AIJ was somehow just accepting cash and managing without a trust arrangement, that is a dreadful problem and could warrant prosecution even without any theft. The regulators’ statement (PDF) orders AIJ to “immediately confirm” the status of funds, including fund segregation. Ick.

Update: According to a story over this weekend, the firm apparently invested most of the cash in a single Cayman-registered investment trust of its own creation, which it then outsourced management of to a British-affiliated bank in Bermuda. This would suggest they may have used the funds as a way to get around fund segregation and gain access to the funds.