The star trader who caused the $1.1 billion Daiwa Bank bond trading scandal has written a memoir in prison, accusing his former employer of working hard to hide the crime from U.S. prosecutors.
In "The Confession," Toshihide Iguchi says that officials from Daiwa Bank and Japan's Finance Ministry secretly met at least four times in Tokyo soon after he confessed to his boss in July 1995 about his unauthorized U.S. bond trading over a 12-year period.Iguchi also alleges that Daiwa executives discussed the possibility of transferring part of their $1.1 billion losses to a paper company in the Cayman Islands to hide them.
"Everyone agrees that if this becomes a problem in America, we will be in big trouble," Iguchi quoted an executive as saying before the scandal became public in New York, where Daiwa's U.S. operation was based.
Officials at Daiwa Bank and the Finance Ministry refused to comment on the book or its allegations.
The memoir will be sold in Japan later this month, its major Japanese publisher, Bungei Shunju, said at a news conference Tuesday as it handed out copies of the book.
In December, a U.S. District Court sentenced Iguchi, who pleaded guilty to fraud, to four years in prison. He also must pay a $2 million fine and $70,000 in restitution.
"I thought that it would be my social responsibility to reveal the truth about the case, which left a huge stain in the Japanese financial history," Iguchi said in a handwritten statement released by the publisher.
Daiwa Bank pleaded guilty in February to conspiring to help hide Iguchi's losses and agreed to pay $340 million in fines. It was forced to close down its U.S. operation.
Two other Daiwa employees charged with smaller roles in the scandal also described a conspiracy involving the highest echelons of Daiwa management during their court testimony.
About 10 days after Iguchi's confession, Daiwa executives held their first meeting in late July 1995 at Park Lane Hotel in Manhattan to discuss how to cover up the loss, Iguchi writes.
He was instructed to keep quiet for several months while the bank considered cover-up measures, Igu-chi alleges.
"I was shocked," Iguchi says in the memoir. "I thought I would be fired within weeks. Imagining doing this for four more months, I felt horrified."