A former controller of a Japanese subsidiary near Chicago has admitted to and settled charges by the Securities and Exchange Commission that he fraudulently cost his company millions of dollars in trading losses and manipulated accounting records to avoid detection.
The SEC said Thursday that Katsuichi Fusamae, who was a senior accounting officer at Molex Japan Co. Ltd. in Lisle, Ill., engaged in unauthorized equity trading in the company’s brokerage accounts that resulted in losses of more than $110 million. He concealed the massive trading losses by taking out unauthorized and undisclosed company loans with Japanese banks and brokerage firms, and he used loan proceeds to replenish account balances and engage in additional trading.
When Fusamae’s long-running scheme came to light and the parent company, Molex Inc., restated its financial statements in 2010, it recognized $201.9 million in cumulative net losses, which included both trading losses and borrowing costs from the unauthorized loans, the SEC said.
Fusamae agreed to settle the SEC’s charges by admitting wrongdoing – a practice the agency has been pushing for since Mary Jo White became SEC chair in 2013 — and accepted a permanent ban from serving as an officer or director of a publicly traded company. Possible monetary sanctions will be determined by the court at a later date.