Daiwa manager jailed for hiding $1.1bn loss

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Masahiro Tsuda was yesterday sentenced to two months in prison for helping to conceal $1.1bn (pounds 690m) in trading losses at the New York branch of Daiwa Bank, where he was general manager, from Federal authorities. He was also fined $100,000, sentenced to one year's probation and must post a $50,000 security bond.

He said that although he had violated American laws, he had done so at the behest of his superiors at Daiwa, which is based in Osaka, Japan, and of Japan's Ministry of Finance.

He said he had taken similar actions in the late 1980s to cover up a $30m trading loss.

Tsuda had pleaded guilty to the charge in April. The plea agreement provided that prosecutors drop a count of concealing a felony. In February, Daiwa Bank pleaded guilty to charges of concealing the loss and paid $340m in fines.

The charges arose from the conduct of its top management during the summer of 1995 when managers deliberately covered up huge trading losses incurred by Toshihide Iguschi, an executive vice-president, at the New York branch.