Former Olympus Corp Chief Executive Michael Woodford said on Friday he has met with U.S. federal prosecutors and hired a Washington law firm, as pressure mounted in Japan on the camera and endoscope maker to conduct an independent probe into controversial acquisitions.

Tokyo Stock Exchange head Atsushi Saito said Olympus risks possible lawsuits if a third-party panel the company plans to appoint to look into the deals is seen leaning toward the management's position.

There should be no prejudice. There are laws to protect shareholders, Saito told a news conference.

Executives at Olympus are struggling to convince shareholders it acted properly in paying a record $687 million in advisory fees to two obscure firms related to the $2 billion acquisition of British medical equipment maker Gyrus in 2008.

That and a string of other acquisitions by Olympus has cost the company more than $1.2 billion in charges and write-offs.

The scandal has seen Olympus' share price fall more than 50 percent since it fired Woodford on October 14 and led to the resignation of Chairman Tsuyoshi Kikukawa.

A Japanese market watchdog, the Securities and Exchange Surveillance Commission, is looking into the company, while the FBI in the United States is also conducting a probe.

Olympus agreed last week to appoint the third-party panel to look into the deals, although it is yet to identify its members. Saito said he suggested on October 14 that it establish such a group.

Woodford, 51, who has said he was fired in a boardroom coup at Olympus for questioning the Gyrus deal, has been publicly raising questions about the deals and met with the FBI earlier this week.

On Friday, Woodford told Reuters in a telephone interview in London that the FBI asked him to meet two federal prosecutors while he was in the United States, He, however, declined to discuss further details about their three-hour meeting.

Woodford also said he had hired Miller & Chevalier, a Washington-based law firm to represent him in the United States. His lawyers had written to the U.S. Securities and Exchange Commission about the case, he said.

Homer Moyer, a Miller and Chevalier lawyer, confirmed he was one of the attorneys representing Woodford but declined any further comment.

Ellen Davis, a spokeswoman for the Manhattan U.S. Attorney's office, declined to comment on any potential Olympus investigation or any meeting Woodford may have had with prosecutors.

Olympus said earlier that it was unaware of any probe by the FBI into payments it made to the financial adviser.

Some media have reported that we have been contacted by the FBI. So far we haven't confirmed that, it said in a statement.

PAYMENTS DEFENDED

Saito described the scandal and management decision that had spurred a sharp drop in the firm's corporate value as very regrettable.

Olympus's shares resumed their slide on Friday, falling 10 percent to 1,217 yen, following a rebound Thursday after Kikukawa, the executive at the heart of the furor resigned as chairman and president.

In a bid to curtail margin trading, the Tokyo bourse said it was temporarily raising the payment required for such trades, when shares are bought with money borrowed from brokers using other securities as collateral.

Kikukawa's successor, Shuichi Takayama, has defended the 92-year-old company's payments to financial advisers New York-based AXES America LLC and Cayman Island-based AXAM Investment Ltd.

That fee amounted to 36 percent of Gyrus's acquisition price. Fees to advisers in M&A deals typically amount to no more than 2 percent.

Takayama also insisted that Olympus had acted properly when it paid $773 million for three domestic firms -- a microwave cookware maker, a medical waste recycler and a cosmetics firm that together employ around 120 people.

Olympus revealed on Friday that combined revenue for the three businesses will likely amount to 6.5 billion yen ($86 million) this business year, less than a tenth of an estimate it made in 2008 for sales of 88.5 billion yen in the 12 months to March 31, 2013.

Saito's call for a thorough investigation comes after Masaki Shizuka, the senior executive officer overseeing listings at the exchange, told a parliamentary committee on Thursday that there were concerns investors might lose trust in information provided by Olympus because the management was in place at the time of the deals in question.