Former Daiwa Manager in N.Y. Pleads Innocent

From Associated Press

A former general manager of Daiwa Bank’s New York branch pleaded innocent Thursday to charges that he helped hide a $1.1-billion trading loss incurred by a rogue bond trader over a 12-year period.

Masahiro Tsuda was charged two weeks ago with failing to report the losses to the Federal Reserve Board and taking other steps to prevent regulators from finding out about the scandal.

Tsuda and Toshihide Iguchi, the former trader at the center of the scandal, are the only two Daiwa employees to be charged so far in the trading fraud case. Authorities also have criminally charged the bank, based in Osaka, Japan, and ordered it to cease operating in the United States by Feb. 2.


Tsuda, free on $100,000 bail, faces a maximum penalty of eight years in prison and $500,000 in fines if convicted.

Tsuda’s lawyer, Stanley Arkin, had no immediate comment on their defense plans. But he has said that Tsuda was merely following directions from his Daiwa superiors and Japan’s Ministry of Finance.