Monday, February 27, 2012

Japanese Hedge Fund May Have Lost or Stolen 200 Billion Yen of Client Pension Funds

Japanese hedge fund AIJ Investment Advisors Co has reportedly siphoned 200 billion yen of client pension assets into private trust funds in the Cayman Islands, where the funds reportedly disappeared according to the SESC.  Interesting that the Japanese equivalent of the SEC can easily tell the original destination of missing client funds, but the SEC and CFTC claim not to have any idea where Jon Corzine sent MFGlobal client funds prior to the MF Global bankruptcy.

(Reuters) - AIJ Investment Advisors Co is believed to have channeled about 200 billion yen ($2.48 billion) of corporate pension assets in custody into private investment trusts in the Cayman Islands, making it difficult to track the missing funds, the Nikkei said.

Japan's financial regulator on Friday temporarily shut AIJ on suspicion it may have hidden losses in the $2.6 billion pension funds it managed.
The Securities and Exchange Surveillance Commission (SESC) suspects that the Tokyo-based investment advisory firm may have used the tax haven to hide information on its investments. AIJ registered three investment trusts there, the Nikkei said.
Pending the results of the SESC's investigation, the Financial Services Agency plans to rescind AIJ's registration, the business daily said.
About 90 percent of the corporate pension assets managed by AIJ have disappeared, the daily said.
AIJ, after signing discretionary investment agreements with the corporate pension funds that worked with it, had the money put into the Cayman Islands investment trusts, the daily said.
AIJ is believed to have instructed that the money, once put into the investment trusts, be managed via a British-affiliated bank in Bermuda.
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