TOKYO - Tokyo police on Thursday arrested a Deutsche Securities employee and a former Japanese client of the brokerage for suspected bribery after the Deutsche official spent thousands of dollars on entertainment.
The Tokyo Metropolitan Police said it had detained Deutsche's Shigeru Echigo, 36, and 60-year-old Yutaka Tsurisawa, a former official at Mitsui & Co group's corporate pension fund.
Last year, Echigo spent roughly 900,000 yen ($8,800) on wining and dining with him and paying for overseas trips and golf outings, police said.
It was to reward Tsurisawa for the Mitsui fund's investing 1 billion yen ($9.7 million) in Deutsche's financial products, police said.
The arrest comes as securities regulators crack down on illicit entertainment of pension fund executives, who are considered public employees in the eyes of the law and subject to anti-bribery statutes if the funds are at least partially invested in the national pension scheme.
Deutsche Securities in Tokyo declined to comment.
A Mitsui spokesman said the company would review the case and consider taking action to prevent a recurrence. Tsurisawa retired from the company in May, he added.
On Wednesday, sources told Reuters that the Securities Exchange and Surveillance Commission (SESC) was set to recommend that Deutsche Securities, a unit of Deutsche Bank, be sanctioned for excessive entertainment of pension fund executives.
The SESC's bribery probes were triggered by a 2012 scandal in which Tokyo-based money manager AIJ Investment Advisors was found to have defrauded pensioners out of more than $1 billion.