Japan has been considered as one of the less strict countries in terms of their insider-trading laws compared to the United States and European countries. However, recent insider-trading by some employees from Nomura Holdings Inc. and Daiwa Securities Group in 2012 made the government to restrict insider-trading more seriously. Since both companies are considered as one of the big companies in Japan, this incident was a big deal to the government. Therefore, Japan has been trying to catch up with its international standards in order to prevent future insider-trading especially by large-scale companies.
According to the Wall Street Journal, many critics has been considered Japanese insider-trading laws as less effective, and they think that its laws should be more strict. Japanese penalties were imposed only on those who trade on inside information; people who leak information can also be prosecuted if they benefit from the trading of others. Whereas insider trading carries a maximum prison sentence of 20 years in the U.S. and seven years in the U.K.
Revised Japanese insider-trading laws states that insider-trading would lead people to spend five years in prison and ¥5 million ($51,500) in fines, which is still lighter than US and European countries’ laws.
Many people think that Japanese government should punish more in terms of insider-trading laws because they think it is unethical actions that criminals to take. Although it is true that insider-trading is unethical action based on the fact that it would cause disadvantages to stockholders financially, there are some debates whether the trading laws should be more harsh or maintain the same laws. I think that insider-trading laws do not have to be harsh because it is very complicated issue and any employees who work in companies like Nomura Holdings can easily get pressured and it would ultimately become their stresses. But I believe that there should be laws for insider-trading, but I think that companies should more focus on strengthening companies’ insider-trading.