Japan’s financial regulator penalised Mitsubishi UFJ Financial Group Inc.’s banking unit and two joint ventures for violating client confidentiality rules. The Financial Services Agency (FSA) ordered MUFG Bank Ltd., Morgan Stanley MUFG Securities Co., and Mitsubishi UFJ Morgan Stanley Securities Co. to improve operations and submit reports by July 24. The scandal has shaken confidence in Japan’s largest banking group, leading some clients to seek other bond underwriters. The FSA revealed that these entities exchanged client information at least 26 times improperly. Finance minister Shunichi Suzuki urged MUFG to implement drastic improvements. MUFG and Morgan Stanley MUFG Securities pledged to prevent future breaches. The banking industry has lobbied for eased restrictions, despite past firewall violations at Sumitomo Mitsui Financial Group Inc.’s brokerage subsidiary.