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Are Japan's stock firms unfair to small investors? A scandal sparks discontent.

Company myths can be misleading. At Nomura Securities, Japan's largest brokerage house, the corporate lore is rich with images of untiring devotion to the interests of the small investor. But when push came to shove during last year's disastrous decline in the Tokyo stock market, Nomura ignored its own myth. Rather than helping small investors, the company furtively paid out millions of dollars to a few large corporate customers to cover losses they had suffered in the market's fall. Even worse, Nomura had allegedly helped arrange loans to Susumu Ishii, the onetime leader of one of Japan's largest crime syndicates. Last...

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