Shares in Japan's disgraced Olympus Corp <7733.T> jumped on Wednesday on speculation that it can escape delisting over an accounting scandal and that the brunt of any punishment will be borne by a few executives rather than the firm itself.

Olympus' share price, which had lost as much as 80 percent of its value after the scandal broke last month, rose 12.7 percent to 720 yen, topping the main board as the heaviest-traded issue by turnover. It was untraded with a glut of buy orders on Tuesday after rising its daily limit the day before.

As long as market participants think that Olympus will not be delisted, the stock will continue to rise. The market is buying back what they sold last week, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

Japan's securities watchdog, police and prosecutors are probing the 92-year-old camera and endoscope maker in a rare joint effort after Olympus admitted last week that it had hid investment losses for decades using funds from M&A deals.

The U.S. Federal Bureau of Investigation and the U.K. Serious Fraud Office are also looking into the case.

In a sign regulators are getting serious after a slow start, Japan's Securities Exchange and Surveillance Commission (SESC) is considering recommending criminal charges against those involved in wrongdoing at Olympus, a source familiar with the matter has told Reuters.

The source said the SESC might also urge that Olympus be fined for false financial reports, a move that could allow the company to stay listed although that outcome is not assured.

Olympus executives are likely to face questioning on a voluntary basis by Tokyo prosecutors as early as this week, the Nikkei business daily reported on Wednesday.

Olympus President Shuichi Takayama has blamed his predecessor, Tsuyoshi Kikukawa, who quit on October 26, along with former vice-president Hisashi Mori and internal auditor Hideo Yamada for the cover-up, and has said he would consider criminal complaints against them. Mori has been fired and Yamada has offered to resign.

OLYMPUS EXECUTIVE TRIO

The Nikkei said Kikukawa, Mori and Yamada had chosen the financial advisory firm for its controversial 2008 acquisition of U.K. medical devices maker Gyrus, a decision normally taken by the entire board of directors.

The trio also made the decision to increase payments to the advisory firm -- payments that were used to conceal huge losses on securities investments by Olympus, the daily said, citing persons familiar with the company.

The scandal burst into the open after Olympus fired British CEO Michael Woodford on October 14 and Woodford went public with his doubts about some questionable M&A deals carried out over the past five years by the maker of cameras and endoscopes.

After weeks of denial, Olympus admitted last week it had found that funds related to its $2.2 billion (1.4 billion pound) purchase of British medical equipment maker Gyrus in 2008, which involved a huge advisory fee of $687 million, as well as payments totalling $773 million for three tiny domestic firms, were used to hide losses on securities investments stretching back to 1990.

Whether Olympus, which has been placed on a watch list by the Tokyo Stock Exchange, can avoid delisting is unclear but market players said its shares would keep rising for now.

Olympus' lenders were to meet company executives later on Wednesday but were not expected to demand changes in loan terms or take any abrupt steps that could hurt their own interests, banking sources have told Reuters.

Lenders are expecting an apology at the meeting, the sources said, but details may be in scarce supply given that a report by an independent investigative committee is not due until early December.

(Additional reporting by Ashutosh Pandey in Bangalore and Taiga Uranaka in Tokyo; Writing by Linda Sieg; Editing by Mark Bendeich)