Japanese financial regulators raided the Tokyo headquarters of Mizuho Securities on Monday, investigating suspected insider trading involving at least one employee within the firm’s investment banking division, according to statements released by both Mizuho Financial Group and the Securities and Exchange Surveillance Commission (SESC).
The SESC, Japan’s financial watchdog, conducted a compulsory search of Mizuho Securities’ main office last month, analyzing seized materials to determine whether to file criminal charges, informed sources said. Mizuho Financial Group confirmed the probe following reports by the Nikkei newspaper, stating the firm is “fully cooperating” with authorities.
Shares of Mizuho Financial Group fell 5.3 percent on Monday, marking the steepest single-day decline since April 2025, as news of the investigation spread. The drop occurred alongside broader weakness in banking stocks, influenced by disappointing economic growth data that dampened expectations for potential interest rate hikes by the Bank of Japan.
The investigation centers on employees within Mizuho Securities’ investment banking unit, though the specific nature of the alleged trading violations has not been publicly disclosed. The SESC and Mizuho Securities both declined to provide further details while the investigation remains active.
This case adds to a growing number of insider trading scandals affecting Japan’s financial industry in recent years. Earlier this month, Tokyo prosecutors arrested a former senior executive at Mita Securities over alleged insider trading connected to Nidec’s hostile bid for Makino Milling Machine. Last year similarly saw multiple similar cases emerge across different institutions.
Mizuho Financial Group has been actively expanding its investment banking operations both domestically and internationally in an effort to diversify its revenue streams. The probe threatens to undermine confidence in Japan’s financial sector, which has recently experienced record-high equity valuations and increased activity in stock offerings and merger transactions.