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AIJ Investment Advisor's operations frozen – investor losses believed to be more than $2 billion

AIJ Investment Advisors Co.’s operations were halted Friday after regulators said the firm allegedly lost “most of'” the ¥183 billion ($2.3 billion) in pension assets it managed.

Japanese credit rater Rating & Investment Information Inc. warned in a 2009 newsletter to clients that AIJ had “unnaturally stable returns” despite a down market. Although AIJ wasn’t named in the newsletter, the description given was enough to identify it for most pension-industry experts, says Hidekazu Nagamori, the managing director in charge of the newsletter.

The warning came a year after AIJ, which has a staff of 12 employees, had been ranked No. 1 by Japanese pension funds in a customer-satisfaction survey conducted by R&I. Bankers familiar with the investment industry say AIJ was known among bigger asset managers for boasting consistently high returns.