Sumitomo Probe Grows Broader

The investigation of Sumitomo Corp.’s $1.8 billion loss in the copper markets has broadened to include firms that traded heavily with the Japanese metals giant.

The Commodity Futures Trading Commission is examining trades between Sumitomo and Global Minerals & Metals Corp. of New York, a small firm that conducted trades for the Japanese firm on the New York Mercantile Exchange.

Also under review is Winchester Metals Ltd. of Winchester, England, which handled many of Sumitomo’s trades on the London Metals Exchange, according to a source who spoke on condition he not be identified.

In another development, two sources said the CFTC interviewed Sumitomo trader Yasuo Hamanaka in a formal deposition in April. That interview tipped off CFTC investigators that “something was wrong.”

Sumitomo Corp. disclosed Thursday that Hamanaka, its star copper trader, falsified the company’s books and records to cover up estimated losses of $1.8 billion over 10 years.