Some executives at Prudential Financial's Japan unit have accepted pay cuts due to employee misconduct.

Some executives at Prudential Financial's Japanese affiliate will take pay cuts after a panel of experts published a report exposing widespread employee misconduct involving client funds at the business unit. Chairman Hiromitsu Tadomaru and two other employees will take a 30% pay cut for three months to take responsibility, the company said in a statement on Thursday. The investigation committee found that problems at Prudential Life Insurance, the US insurance group's Japanese affiliate, stemmed from structural flaws in its governance framework and business model. This is the latest in a series of scandals in Japan's insurance industry in recent years. Japan's financial regulator is considering penalties against Prudential Life Insurance, including a temporary suspension of operations, according to a person familiar with the matter. Prudential Life Insurance set up the committee after it disclosed suspected misconduct by more than 100 current and former salespeople that caused customers to lose more than 3.1bn. The cases involved employees selling fake investment products and borrowing money from clients, among other things. Company executives plan to hold a media briefing later on Thursday.