Japan's Financial Services Agency ordered a bank and two brokerages under Mitsubishi UFJ Financial Group Inc. on Monday to improve their operations after they were found to have shared undisclosed information about customer businesses among themselves without permission.
Based on the Financial Instruments and Exchange Act, the agency urges MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities Co. and Morgan Stanley MUFG Securities Co. to prevent a recurrence by strengthening their business and client information management.
The agency also ordered the parent company, Mitsubishi UFJ Financial Group, to check its supervision and submit reports based on the Banking Act.
Earlier this month, the Securities and Exchange Surveillance Commission recommended the Financial Services Agency to take punitive action against the firms after finding MUFG Bank illegally shared information about several customer companies from 2021 to 2023.
The watchdog said it has confirmed a case in which an executive of the bank shared client information with two affiliated brokerages despite being refused permission.
The Financial Instruments and Exchange Act prohibits nonpublic client information be shared among related banks and brokerages without the consent of clients, requiring a "firewall" to be put in place to prevent such acts.
