TOKYO, June 14 (Reuters) - Japan's securities watchdog

on Friday recommended that the banking and securities units of

Mitsubishi UFJ Financial Group ( MUFG ) be penalised for

what it said was unauthorised sharing of client information.

The Securities and Exchange Surveillance Commission (SESC)

made the recommendation to the FSA banking regulator, which

hands out such punishments in Japan. The recommendation, which

was widely expected, followed the SESC's investigation into

Mitsubishi UFJ's banking arm and its two brokerage ventures with

Morgan Stanley ( MS ).

(Reporting by Anton Bridge

Editing by David Goodman

)