A note on “Yakuza money”: How recent yakuza earn from venture market.

Amazon.co.jp: ヤクザマネー: NHK「ヤクザマネー」取材班: 本
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ヤクザマネー 株で大きく稼ぐ – YouTube

Context:

The documentary by NHK aired on TV in 2007. It unearths the ongoing trend of the yakuza —penetrating finance market tied with citizens. Of course, the yakuza had already strong relationship with finance, companies, and politics in the past.
But as anti-yakuza law and its constant amendments had been in effect, to keep relationship with the yakuza was becoming to be hard, at least publicly. The law illegalized most of the yakuza’s earning ways.

As a result, the current yakuza have been squeezed. They are finding a way to survive. And They are making ties with citizens who have a specialized skill, like traders, ex-securities salesmen, ex-bankers. Emerging “symbiont”, yakuza’s cooperative citizens of non-propertied-class, are the most worried phenomenon by the Japanese police.
As a countermove, In 2010 every prefectures of Japan had had yakuza exclusion ordinance which aims to cut relationship between citizens and the yakuza. Some prefectures impose penalty against citizens for giving benefit or making close contact to the yakuza.
The documentary and its book published in 2007 is the prelude of such latest trend.

 

So, how do the yakuza penetrate into venture market?
yakuza_money

1. Participating in stock trade:

The first instance in the documentary is participating in the day-trade market. In a room of an apartment, a young parson is wiggling the mouse. He is day-treader hired by the yakuza.
He said that he trades three hundred million yen a day with one percent of surpass. During 20 days in a month, they earn 20 percent of the original principal, meaning 60 million yen(p. 36). Of course the original money came from illegal acts by the employer —yakuza.

This is not just participation because the yakuza has insider information from their networks of companies, so that they can know faster than other traders about the timing of announcing a new product, merger, or acquisition(p. 38). So the young day-trader and the yakuza are both benefited by each other.

Brokerage houses don’t permit yakuza to open accounts, but get a homeless changing resident register and making a credit card. The deregulation and expanding online stoke trade makes it easy to creep into the market(pp. 40-1).

 

2. Investing venture companies as “Black angle”:

スクリーンショット 2014-04-05 18.00.18
Yakuza not only participate in the market as trader, but invest venture companies with their abundant money.
Why do venture companies rely on the yakuza? Many venture companies were boosted by venture bubble, but after livedoor incident in 2006, fundings have been strongly tightened. Banks are stubborn and slow to decide to lend money.
In contrast, the black angel boasts its speed to decide. A yakuza in the documentary says he can put money within three days(p. 62).

But there are trade-offs. The yakuza takes large portion of stocks of the company and carte blanches, and searches for the CEOs’ personal weak points. After that, the company is hijacked by the yakuza. Nevertheless more than 80 companies asked for the fund(pp. 63-4). As a result, that companies could become to be limbs of the yakuza.

 

3. Highjacking a company, damping the share, and sucking its assets:

Zeku was a promising company, but it mysteriously released its 36 hundred million yen and bankrupted. it’s only two years after listing Tokyo Stock Exchange’ Mothers(Market of the high-growth and emerging stocks), and only half a year after reaching the highest stock price(p. 92-3).

This upset is highly suspected to be yakuza’s attack. The company was seeking fund to expand operation by increasing in capital stock. Then successfully got money in exchange for new stocks to a financial broker.
The financial broker is a collaborator of the yakuza and would be the planer of it. According to him close associate, the executive officers, who either became yakuza’s associates or grabbed their weak points, released the company’s money to yakuza.
The broker also sold the stock and its money went to the yakuza. It is a kind of stock price manipulation as well, through flaming expectation by funding then sold the stock.

A auditor of the company noticed just after that, and furiously demanded for stepping down of CEO at a board meeting. But all of other executive officers denied, and reversely decided to oust the innocent auditor(p. 107).
The sequence reminds me of Olympus scandal.

 

4. Fooling banks to receive fund:

It looks a comedy. The yakuza set every stuffs in a office to deceive bank’s negotiators. They would invite and give presentation to get money from a bank in a fake office. So they prepared couches, a registry plate and newsletters of chamber of commerce(it’s real stuff), and forged certificates in the office. The webpage as well.
But what about clerks and CEO? They hired citizens from online as part-time actors.
In addition, the yakuza hired an ex-securities salesman and an ex-banker to delude an experienced persons in charge from an bank(pp. 165-6).

 

So the yakuza have big businesses? Maybe no, compared to 80’s. It’s due to the law and the ordinances pursue to make yakuza’s act illegal from 90’s to 2010 or latest.

But my concern is penalty for the yakuza-associate citizens by the ordinances. It prevents new-comers from becoming yakuza-associates, but those who are already associates and financially urgent persons would have more weakness against the yakuza.
Once they contact with the yakuza, they are possibly regarded as criminal. The yakuza can use the condition. They can dare to touch with citizens, and the touching itself could be a way of extortion. It could provides yakuza with new pitfall for the victims.
The yakuza have been finding a way of surviving, so this time would be also not critical for the yakuza.

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