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Fund manager indicted in Livedoor case

Murakami allegedly spent $86 mil on 1.93 mil shares

Yoshiaki Murakami, one-time high-flying investment guru, was indicted Friday on suspicion of insider trading in Nippon Broadcasting System stock by Tokyo District prosecutors.

According to the indictment, Murakami, manager of the Murakami fund, spent $86 million on 1.93 million shares of the radio broadcaster after learning in November that Internet powerhouse Livedoor intended to buy at least a 5% stake as part of a hostile takeover bid of NBS parent Fuji TV.

Murakami, who got the news from former Livedoor prexy Takafumi Horie and director Ryoji Miyauchi, purchased the shares between Nov. 9, 2004, and Jan. 26, 2005, before Livedoor made its intentions public, the indictment says.

Prosecutors told news media Murakami confessed to the insider trading knowing that the Livedoor purchase “would have a major impact” on the NBS share price.

By Feb. 7 the Murakami fund was the leading NBS shareholder with 6.34 million shares and a 19% stake. The next day, Murakami sold 3.28 million shares to Livedoor off hours and another 2.41 million shares during regular trading on Feb. 23.

Prosecutors estimated that the Murakami fund scored a $26 million profit from its insider scoop.

On Feb. 21 Livedoor announced that it had acquired 40% in voting rights to shares of NBS — the opening salvo in the fierce Fuji takeover battle.

As part of a truce, Fuji agreed to buy a 12.75% stake in Livedoor for $382 million.

In January, Livedoor prexy Horie and four other Livedoor executives, including Miyauchi, were arrested on charges of falsely stating company earnings.

Livedoor’s shares plunged and it was delisted in April from the Tokyo Stock Exchange. In March, Fuji sold its Livedoor shares to the prexy of broadband giant Usen for $82.6 million.

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