The Securities and Exchange Commission announced that Hajime “Jim” Sagawa settled civil charges for his role in a major accounting fraud cover-up at Olympus, agreeing to be barred from working in the securities industry. The SEC said that Sagawa will not be required to pay a penalty due to his strong cooperation during the investigation.

The Olympus fraud is one of the biggest corporate scandals in Japan’s history. It left the medical equipment and camera maker in need of a capital infusion and put it at risk of being delisted from the Tokyo Stock Exchange.

Sagawa, a former PaineWebber banker, ran a now-defunct brokerage which earned a $687 million fee for advising Olympus in a $2 billion acquisition deal in 2008.

In 2011, Olympus admitted that the deal was part of a 13-year cover-up to hide $1.7 billion in losses, and said it had used improper accounting to conceal investment losses and restated years of financial results.

According to the SEC, from the late 1990s until 2010, two Olympus executives hid billions of dollars in losses by transferring the funds to a “secret web” of entities in the Cayman Islands and British Virgin Isles, which were used to purchase failed investments using bank loans.
To repay the banks, the SEC said Olympus hired Axes America, a brokerage partially owned by Sagawa, to advise them.

Sagawa then helped the executives by accepting a “disproportionate financial advisory fee” that he then transferred to the off-shore firms so they could repay the banks, the SEC said.

In addition, Axes America also advised Olympus on a $2 billion takeover of the British medical instruments company Gyrus Group PLC in exchange for advisory fees and Gyrus preference shares worth $687 million, according to the SEC.

Later, Sagawa offered the preference shares back to Olympus for $622 million, and one of his brokerage’s affiliates then routed to the money to the off-shore entities that were repaying the bank loans, the SEC said.

To date, the SEC has not charged Olympus in connection with the fraud, though in 2013, Britain’s fraud prosecutor filed charges against the company.

Tokyo prosecutors also previously charged several figures in connection with the fraud, and the company was fined 700 million yen ($7 million) for violating securities laws.

To view the full SEC news release, click here.