MUFG issues apology after authorities recommend administrative action

Its two companies were accused of inappropriately sharing data between them.

Mitsubishi UFJ Financial Group (MUFG) has issued an apology relating to alleged problems in the collaborative business of its banking and securities entities, including alleged inappropriate sharing of customer information between its banking and securities entities. 

On 14 June, Japan’s Securities and Exchange Surveillance Commission (SESC) recommended that the prime minister and the Commissioner of the Financial Services Agency (FSA) take administrative action against MUFG Bank and the Mitsubishi UFJ Morgan Stanley Securities (MUMSS).

“We sincerely apologize for the inconvenience and concern this has caused our customers and other stakeholders,” MUFG said in a statement published on its website.

The SESC’s recommendation was reportdedly made in response to requests for administrative action in relation to problems with MUFG Bank and MUMSS’ banking-securities collaborative business. The requests also cover supposed problems in their management of information–including pertaining to corporate relationships–and related monitoring systems.

MUFG Bank and MUMSS are said to have inappropriately shared customer information between them. 

MUMSS also allegedly inappropriately concluded financial product transaction contracts after overlooking the prohibition of—or encouraging—securities-related business at registered financial institutions.

MUFG said that it recognizes that it has “insufficient” awareness of compliance as well as monitoring.

“In light of this recommendation, we recognize that, in addition to insufficient awareness of compliance with the Banking Act and the Financial Instruments and Exchange Act based on a correct understanding of these laws, systems for checking and detection at our monitoring departments were insufficient,” MUFG stated.

MUFG, MUFG Bank, and MUMSS take the recommendation “very seriously,” the financial institution stated.

“We accept that the current recommendation calls for the appropriate enhancement and acceleration of internal control and checking functions of the MUFG Group Companies in a manner that suits the actual conditions of the banking-securities 
collaborative business,” MUFG stated.

It added the the companies will “renew their efforts to strengthen control systems” as well as make effort to implement measures to prevent recurrence.

MUFG said that they are considering the formulation and thorough implementation of procedures and rules in line with case studies and actual conditions, more practical training, and more in-depth enhancement of detection and checking functions in branches and relevant head office divisions.