Yakuza: Organized Crime Represents The “Biggest Private Equity Firm in Japan”

October 5th, 2008

I’ve said it before: The setting in Snowcrash is the best guess about where we’re headed. Maybe with hints of Syndicate Wars

Via: Times Online:

Japan’s powerful yakuza organised crime syndicates are mounting a widespread assault on the country’s financial markets that may have left hundreds of listed companies riddled with mob connections.

In a surprisingly stark admission, the National Police Agency (NPA) says that it is locked in a battle for the economic soul and international reputation of Japan.

Police investigations suggest that the yakuza have become voracious traders and manipulators of listed Japanese shares, and, via a network of about a thousand apparently legitimate front companies, occupy big positions on the shareholder registers of many companies that may not even be aware of the connection.

According to one veteran expert on the yakuza, the new activities of the nation’s largest crime syndicates have effectively turned the mob into the biggest private equity firm in Japan.

In a White Paper on the subject, the NPA gives warning that the yakuza’s switch from old-fashioned crime rackets such as drugs and prostitution to mainstream financial markets is “a disease that will shake the foundations of the economy”.

Japan’s Securities and Exchange Surveillance Commission has compiled a watch list of hundreds of companies suspected of direct or indirect links to mafia money. The list, which was drawn up in private but has been seen by The Times, includes more than 200 publicly traded companies, many of which are household names in Japan.

The issue has become so acute that the Osaka Stock Exchange has been forced to introduce an entirely new screening system to establish which companies have direct mob links or large quantities of yakuza money on their shareholder registers. Scores of companies, one exchange source said, faced the threat of being delisted.

As well as flagging the risks of a yakuza invasion of financial markets, the police’s report also sounds alarm bells over the property and construction sectors. The greatest risk, it says, is that the yakuza gangs match the operational strategies of mainstream global corporations and outsource much of their financial chicanery to “co-operative groups”.

Yet even as police and regulators rush to address soaring yakuza interference in the securities industry, close observers of the Japanese mafia believe that the problem now may be beyond control. The sophistication of the crime gangs has grown exponentially in recent months. Many have begun to hire newly unemployed traders, who have been laid off by large financial houses feeling the squeeze of the credit crunch.

According to one in-depth investigation by NHK, the state broadcaster, a few yakuza gangs even operate their own stock-dealing floors, where millions of dollars of shares are traded every day. A newly published book on the subject – Yakuza Money – claims that the presence of skilled former bankers, stockbrokers and accountants on the yakuza’s extended payroll has dramatically increased the mob’s income stream and made it virtually impossible to discern the difference between legal and illegal funds as they flow through the Japanese markets.

Joshua Adelstein, an author and consultant on the yakuza, says that one of the key recent developments has been the emergence of mob-backed auditing firms. It is by getting these auditing firms to sign-off false company accounts, he said, that the yakuza were able to manipulate both the apparent earnings and stock prices of numerous small listed companies.

Mr Adelstein said: “The police are worried, but they are understating the problem. Organised crime has made tremendous inroads into the Japanese financial sector. The bad guys now have everything in place to manipulate the stock market.”

Research Credit: cptmarginal

Posted in Economy, Elite | Top Of Page

2 Responses to “Yakuza: Organized Crime Represents The “Biggest Private Equity Firm in Japan””

  1. Miraculix says:

    The grandest irony of such a story is their dodging the biggest elephant dancing on the table; that ALL of world finance is dominated by the “globalized” criminal class, of which Japan is perhaps the most easily highlighted — and in the West vilified — example.

    Think about it: what would you call stealing $700 billion in broad daylight?

    Protection money. Pay up or we won’t just “pull” a few buildings, we’ll shear the last remaining structural pillars of the entire finance sector and de-capitalize the entire global economy.

    The Snowcrash scenario is closer than most other literary examples, you bet. I’ve got a copy of Quicksilver sitting right here, just waiting for me to get started; and when the first throes of winter arrive, that’s where you’ll find me.

    I will wager anyone in the world a €urobuck that what we think of as “organized crime” and politics have been synonomous since the beginning. Indeed, they are one and the same, and the only substantive differences are semantic.

    Enter Chomsky, Great Gatekeeper and Intellectual Conprador of the “Radicalized Left”. I can only hope Herr Hegel has been consigned to the most painful Hieronymus Bosch visions imaginable in his new home. He earned it.

  2. Eileen says:

    @Miraculix – What is the Quicksilver you speak of? Interesting that today’s financial news was headed by the Japanese markets – where accordingly, the Mafia must be in a total panic of selling off their shares in the United States of America, for which it now stands, one nation under the various dieties they believe in. The other totally divisible – those who believe an unregulated market will not be gamed, and that an unregulated market is run by those we can trust not to be crooks. Right. Buy low, sell high. Just keep on sending that money to your 401K for deferred tax purposes. What a laugh.
    The other side of the divide is comprised of people like me, who do know that there are crooks and liars who are so effing greedy that they have totally gamed- and Mafi-ad the system. The US has been run by the Bush and Cheney Mafia for what seems like eons now. Uh, and with a mouth full of cotton stuffing my face, I say to you – we aren’t finished with you yet.
    I got to go back and rewatch some gangster/Mafia movies. Specially the one where the Mafia owned the booze market during the Prohibition.

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