October 2, 2022

Volume XII, Number 275

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September 30, 2022

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Banker Settles with SEC for Role in Olympus Scandal

The Securities and Exchange Commission agreed to a settlement with Hajime Sagawa related to his alleged role as the principal and minority owner of a broker-dealer that assisted Japan based Olympus Corporation in its concealment of losses by using offshore entities.

Over the course of more than a decade, Olympus executives are alleged to have hidden losses in offshore entities based in the Cayman and British Virgin Islands that they controlled but did not consolidate in Olympus financial statements. According to the SEC, these entities purchased poorly performing investments from Olympus with bank loans secured by assets owned by Olympus.

In order to repay these loans, Olympus retained Axes America, LLC, a registered broker-dealer managed by Sagawa, as its financial advisor for several transactions. The SEC claims that Olympus paid Axes disproportional fees for these transactions that were routed back to the offshore entities and were used to pay the bank loans. The SEC charged that Sagawa violated Section 17(a)(1) and 17(a)(3) of the Securities Act of 1933 and aided and abetted Olympus in violating Section 15(c)(1)(A) of the Securities and Exchange Act of 1934. The settlement bars Sagawa from the securities industry, but notably the SEC declined to impose a civil penalty based upon his cooperation with its investigation.

In the Matter of Hajime Sagawa, Admin. Proceeding File No. 3-16412 (SEC Feb. 27, 2015).

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume V, Number 65
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About this Author

Michael Rosensaft, white collar criminal litigator, Katten, New York Law Firm
Partner

Michael M. Rosensaft focuses his litigation practice on representing individuals and businesses in white collar criminal matters, regulatory enforcement matters, corporate internal investigations, insurance and health care fraud and complex civil litigation.

Prior to joining Katten, he served as an Assistant US Attorney for the Southern District of New York. In that capacity, Michael oversaw the investigation and prosecution of numerous criminal cases involving terrorism, international money laundering, export violations, bribery of foreign...

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