http://blogs.wsj.com/japanrealtime/2012/02/24/missing-funds-at-aij-watchdogging-japan/ Missing Funds at AIJ: Watchdogging Japan. By Kana Inagaki and Phred Dvorak The revelation that billions of dollars may have gone missing from client funds managed by a little-known Tokyo asset management firm highlights a sobering fact about Japanese financial regulation: It's pretty spotty. Bloomberg NewsJapan's financial watchdog Friday said investigators were looking into the alleged disappearance of "most of" the 183 billion yen, or about $2.3 billion, in pension-fund assets managed by AIJ Investment Advisors Co. Details are sketchy: regulators haven't said exactly how much is supposedly lost, how many clients AIJ had, nor even whether they suspect foul play. But we do know that if AIJ was doing anything wrong, the chances of its being caught out by Japan's regulators were pretty slim. Investment managers like AIJ are required to submit business reports to regulators once a year, Japan's Financial Services Agency says. If those regulators suspect problems, they can carry out hearings. And some companies actually conduct voluntary audits of their own businesses. (AIJ was not one of them.) A firm involved in dubious activity would need to be fairly unlucky to find itself caught in the net of one of the Securities and Exchange Surveillance Commission's annual audits. The regulator conducted inspections of 15 investment managers in the year ended March 2011. Since there were 299 such firms in total, the chances of getting audited were about one in 20. The FSA says it's now going to do an audit of all 263 firms that have similar investment-management mandates to AIJ's. According to Japan's Nikkei daily, AIJ may have misled clients for years, claiming they had cumulative returns as high as 240%. It all makes for a fairly bleak spell for Japanese financial regulators. After all, the discovery of pension funds missing at AIJ comes only months after camera-maker Olympus Corp. admitted to it successfully hid more than $1.5 billion in losses for 13 years.
Another few thousand Japanese over 65 year will be destitute..No pensions for the elderly in Japan. Regards Errol 43
