An aggressive pursuit of profits, exacerbated by poor internal controls and compliance weaknesses, were the reasons for the release of non-public information from fund managers in three insider trading cases that were unveiled this year, the Tokyo-based brokerage admitted. These leaks include information exchanged on Tokyo Electric Power, Inpex and Mizuho shares long before these were issued. These leaks would encourage hedge funds to reap profits by shorting stocks -- repurchasing shares at a lower price and pocketing the difference, market participants have said.
Regulators are ramping up a probe into the bank's operations. Company officials will disclose the findings later in the day, the Nikkei business daily's online edition reported.