Decades of Fraud Under Investigation at Prudential of Japan

An investigation and subsequent course-correction into fraud spanning nearly 35 years is likely to result in up to $350 million in losses for the insurance provider Prudential Life Insurance Company, Ltd. (Prudential of Japan).

The company, a subsidiary of Prudential Financial, Inc., announced on 3 February that it is freezing new sales and hires while it deals with a series of misconduct cases involving more than 100 current and former employees who defrauded hundreds of customers.

What Happened?

Between 1991 and 2025, at least 106 employees for the insurance company defrauded roughly 500 customers of ¥3.1 billion ($19.9 million).

The employees took advantage of their role as a “life planner” to accomplish this. Customers were paired with an employee, who would be trusted to map out the customers’ life plans. Life planners worked independently and with little oversight from management. Some of the fraud involved employees improperly receiving funds from customers, with methods including soliciting for investments or borrowing money from customers.

The company began investigating the misconduct in August 2024 and released findings on 16 January 2026.

As part of an internal review, Prudential of Japan reached out to customers and asked if they had experienced “questionable monetary dealings” with employees, according to Insurance Business Magazine.  

In at least one case, a former employee used Prudential documents to convince customers to invest in a fictitious product. Another former employee deceived three customers into giving over millions in stocks that he claimed were only able to be purchased by Prudential employees.

“The company also confirmed that 69 current and former employees had introduced unapproved investment products and firms to roughly 240 customers… Employees did not directly receive these funds, but Prudential said it imposed disciplinary measures for violations of internal rules,” Insurance Business reported.  

The investigation determined that one of the reasons for the misconduct was that compensation at the company is heavily based on performance, dependent upon the number of new deals that an employee secures each month.

“Another factor that led to the misconduct, which includes soliciting investment products not connected to the company’s insurance business and taking personal loans from customers, was the extremely close and private relationship that life planners had with their clients,” The Japan Times reported.

What is Prudential Doing?

In late January, Prudential of Japan created a committee to handle compensating the victims. As of 9 February, roughly 300 customer compensation claims have been made against employees, which the company said it would continue to investigate. Some customers have already been compensated, either by the company or the current or former employee at fault.

One of the larger changes planned is a shift in the company’s business model, according to new CEO Hiromitsu Tokumaru. He took the helm after former president and CEO Ken Mabara resigned on 1 February. Going forward, Prudential will assign a support team to each customer instead of relying on a single consultant.

Another planned reform will address how employees are compensated, with the goal of making it less stressful and competitive, according to The Japan Times.

Prudential of Japan announced it was voluntarily suspending new sales for 90 days (or until 10 May 2026), which would give the company time to implement reforms.

“I would like to deeply apologize for the harm this matter has caused to our customers and stakeholders,” said Tokumaru in a press release. “The decision to enter into a voluntary suspension of new sales activity is an important step to rebuild trust and implement necessary changes to our organization.”

The company's shares dropped following the announcement, which Prudential said it expects to result in a $300 million to $350 million impact on its profit this year, Bloomberg reported.

Prudential of Japan has also paused hiring of new employees while it reworks its recruitment process. Recruitment “is being tightened to emphasize ethics and sustainability for work in a financial institution,” Insurance Business reported.

The company also announced that it will create a third-party panel made up of lawyers to investigate issues with Prudential’s governance system.