TOKYO—Trevor Hill was sitting down to a takeout dinner with his wife on their moving day into an empty-nester apartment when prosecutors showed up at his door. The 51-year-old American, a rare foreigner to make it to the top ranks of a Japanese brokerage in Tokyo, knew authorities were looking into some trades in his unit. But he had no idea what was about to hit him.
Within hours, Mr. Hill was under arrest, taken to a Tokyo jail to be interrogated without a lawyer present and turned into the subject of wall-to-wall national media coverage. Prosecutors accused Mr. Hill and traders working for him at SMBC Nikko Securities Inc. of a market-manipulation scheme. In an echo of the frenzy over former auto titan Carlos Ghosn’s arrest, Japanese media depicted it as one of the most serious financial offenses of this century.