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Copper-trading king jailed
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October 22, 1996: 9:43 a.m. ET
Former Sumitomo trader Hamanaka arrested on charges of forgery
From Correspondent Bill Dorman
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TOKYO (CNNfn) -- The one-time king of copper trading, Yasuo Hamanaka, was arrested Tuesday on charges of forgery relating to the loss of $2.6 billion by Sumitomo Corp.
The arrest followed the filing of a formal complaint by the trading giant against Hamanaka, its former chief copper trader.
Officials of the Sumitomo Corporation say Hamanaka faked the signatures of two supervisors on documents, giving him full authority for copper trading and the transfer of funds.
Sumitomo executives again stressed that Hamanaka's supervisors had no knowledge of his unauthorized trades. But that doesn't mean his supervisors are facing any negligence charges.
"We would like to wait for the completion of our in-house investigation before we make any judgments," Sumitomo managing director Naoki Kuroda said.
Kuroda added the company is pressing the forgery charges against Hamanaka because they may be the least difficult to prove. Charges of breach of trust will come later.
With the arrest of Hamanaka, Sumitomo clearly hopes to close a chapter in the copper-trading scandal. But for the huge trading company itself, the story is far from over.
Sumitomo still faces investigations by regulatory officials in the United States and Britain. And the question of management's knowledge -- or lack of it -- still lingers.
"He obviously was quite well known, externally as well as within the company. He apparently had rather a favored position," management consultant James Abegglen said. "It does seem quite odd that it could have gone on so long, and on so grand a scale, without there being some kind of attention paid."
After more than 10 years of unauthorized copper trades, Sumitomo is now paying attention.
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