Fund Manager Murakami Arrested on Insider Trading Charges
Yoshiaki Murakami, whose efforts to unlock value in Japanese companies made him a hero to investors and a villain to many Japanese executives, was arrested on June 6 on suspicions of insider trading. In a nationally televised news conference, Murakami said he had continued to accumulate shares of Nippon Broadcasting System (NBS) after he had been told by Livedoor chief executive Takafumi Horie that he intended to launch a takeover bid of NBS. Murakami said that, after reviewing Japan's insider trading rules, he thought his actions could be interpreted as a violation, even though he had no intention of breaking the law.

UPDATE 6/09/06 Some investment professionals are viewing the arrest as a positive development. They say the arrest shows that market regulation is working, and that the fact that such an important figure could be arrested is evidence that authorities are willing to go after the big fish. The arrest is also being cited as proof that, in an environment of increasing day trading on rising M&A activity, regulators are willing to take aggressive action to limit dodgy trades. Other investors remain suspicious, however, and believe it was Murakami's efforts to make Japan's stodgy stock markets more like America's that did him in. Regardless, the immediate reaction by Japan's markets has not been good, with huge sell-offs as foreign investors pull money out of Tokyo.