An investigation into Livedoor triggered the Japanese stock market's biggest loss in nine months on Tuesday.
That was despite Livedoor CEO Takafumi Horie attempting to reassure investors that the business was sound.
Livedoor trades on the Tokyo Stock Exchange's Mothers market for startups. It had a market capitalization of 730 billion yen ($6.3 billion) as of Monday, nearly 10 percent of the total market value for Mothers.
On Tuesday, its shares were untraded for most of the day with a glut of sell orders, before ending down 14.4 percent at 596 yen.
According to the Nihon Keizai financial daily, executives at the company's Livedoor Marketing unit exchanged e-mails in which they agreed to mislead the public on an acquisition of a publishing firm.
The report, in Tuesday evening's edition of the Nihon Keizai, came after prosecutors raided Livedoor's offices on suspicion of securities law violations late on Monday.
On Tuesday, Tokyo's benchmark Nikkei 225 fell 2.84 percent to 15,805.95, its biggest one-day percentage drop since last April. | 
