The recent episode involving the Japanese company Livedoor and its young, newly arrested former president, Takafumi Hori, has Japanese legislators fuming for a regulatory agency with teeth, like the U.S. Securities and Exchange Commission. According to Associated Press, the alleged cover-up of losses and dissemination of false information by Hori and others at Livedoor that led to a massive market sell-off on the Tokyo Stock Exchange peeled away the inadequacies of the unit of the Financial Services Agency that is supposed to monitor the markets. “We definitely need stricter rules,” legislator Kazuyoshi Kaneko said before Parliament. Currently, Japan’s securities laws are said to be too fuzzy and light on heavy penalties. If Japan aspires to be like the SEC, however, at the very least it will have to beef up its staff. Japan’s Economy and Banking Minister Kaoru Yosano blames understaffing at the FSA for the fiasco; the office monitoring the markets has 300 staff members, compared with 3,000 at the SEC.
