The Japan Securities and Exchange Surveillance Commission has recommended that the Prime Minister and the Commissioner of the Financial Services Agency take administrative action against Buddy Capital Co., Ltd. following an inspection that found serious deficiencies in the firm’s governance and internal control arrangements for its investment advisory and agency business, alongside conduct issues linked to crypto-asset related solicitations. The inspection found that the firm had not secured personnel with sufficient knowledge and experience or an adequate operational and compliance framework, with the sole director, Megumi Suzuki, nominally holding multiple key functions without staffing support. It also identified a non-employee, Kenichi Tsunoda, as exercising control equal to or greater than the representative director through involvement in sales operations and funding day-to-day expenses, despite no outsourcing contract. Sales staff were found to have recommended crypto assets despite the firm’s stated position, provided support to customers to trade crypto assets via exchange accounts, and in some cases gave explanations suggesting reliable high dividends without adequately explaining key risks such as potential loss and liquidity. The Financial Services Agency received more than 100 complaints between February 2024 and January 2026 about the firm’s crypto-asset related sales activities, with management learning details largely through regulator inquiries and failing to implement effective remediation. The inspection further found that the representative director had ceased conducting stock analysis and selection from around October 2024, leaving such work to sales staff, that head office management lacked access to key customer interaction records managed at the sales office, and that internal audit had never been performed since registration. The Commission concluded that the circumstances fell within grounds for supervisory disposition under the Financial Instruments and Exchange Act, including failures to maintain required staffing and systems and interference with inspections, citing deletion of important evidence by sales staff during the inspection.
Japan Securities and Exchange Surveillance Commission 2026-04-17
Japan Securities and Exchange Surveillance Commission recommends administrative action against Buddy Capital for internal control failures and inspection obstruction
The Japan Securities and Exchange Surveillance Commission has recommended that the Prime Minister and the Commissioner of the Financial Services Agency take administrative action against Buddy Capital Co., Ltd. over serious governance and internal control deficiencies. The inspection identified inadequate staffing and compliance frameworks, de facto control by a non-employee, misleading crypto-asset solicitations that generated over 100 complaints, cessation of proper investment analysis, lack of internal audit, and deletion of evidence during the inspection, which the Commission considers grounds for supervisory disposition under the Financial Instruments and Exchange Act.