When Japanese prosecutors earlier this year charged Takafumi Horie with breaking securities laws, there was some speculation that more would follow. Given suspicions that there may be a broad pattern of misdemeanours, Japan’s appetite for reform could thus be measured by whether or not prosecutors stopped at the high-profile and anti-establishment head of Livedoor.

Prosecutors on Monday swooped for the second time, indicting Yoshiaki Murakami. However, that offers few clues as to regulatory intent. Like Mr Horie, Mr Murakami has upset the old guard, in his case by agitating for improved shareholder value. The former government bureaucrat is also a high-profile target – as illustrated by the news helicopters shadowing his every step as the news of his troubles broke. He was caught buying up shares in Nippon Broadcasting System, after Mr Horie chatted about his plans to launch a takeover bid for the broadcaster.

Mr Murakami has admitted as much, so his indictment is not in question. But it is still not clear that regulators are on a sweeping crusade to eliminate insider trading. The watchdogs have brought fewer than 40 cases since the Securities and Exchange Surveillance Commission was set up over a decade ago. Yet insider trading flourishes, if share price spikes and local reports are anything to go by. Indeed, the Japanese system in many cases encourages a two-tier market of those with information and those without. Local newspapers routinely publish company results ahead of official announcements. Indeed, prosecutors are themselves guilty of letting advance information trickle out. Following this pattern, Japan’s stock market fell on Friday morning after local papers reported that Mr Murakami was being investigated. Unless more cases follow, it will be very tempting to view Mr Murakami as a trophy scalp.

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