Hedge Fund Linked To Olympus Accounting Scandal

Nov 16 2011 | 9:48am ET

Japanese camera maker Olympus Corp. may have used investments with a  well-known Bermuda hedge fund to hide more than US$1 billion in investment losses.

A former Paine Webber banker told Reuters that his former firm helped craft so-called "tobashi" schemes to allow Olympus to hide huge losses from the collapse of Japan's economy in the 1990s. Among those techniques were a series of investments with Olympia Capital International, brokered by Paine Webber.

According to the banker, who wished to be unidentified, Olympus invested hundreds of millions of dollars with Olympia. Generally investments were made in the closing days of Olympus' fiscal year, and usually earned Olympus a 33% dividend. But rather than reporting that return, Olympus would book its investment at cost and use the profit to offset older investment losses.

Olympia, which was acquired by CACEIS Investor Services four years ago, is not accused of any wrongdoing in the scheme, which was arranged by two Japanese bankers, formerly at Paine Webber, at the center of the Olympus scandal. But Olympia founder Oskar Lewnowski expressed his disbelief at the allegations.

"That doesn't sound right at all," he told Reuters. "I don't think this was ever done."

Olympus admitted last week that it has been covering up losses since the 1990s, losses that could have exceeded US$1.68 billion, one Japanese newspaper estimates.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.