(Provisional Translation)
December 21, 2001
Financial Services Agency
An administrative action against Goldman Sachs Japan Ltd., Tokyo Branch
1. Short-selling in breach of Securities & Exchange Law
(1) | Short-selling of stock on its own account without disclosing the fact of short-selling to the exchanges in the execution of borrowing stocks with call option.
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(2) | Short-selling of stocks on its own account in execution of VWAP (Volume Weighted Averaged Price) without disclosing the fact of short-selling to the exchanges and at the prices lower than the latest published one.
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(3) | The series of conducts above are found to violate the Article 26-3 (1) and (6), the Article 26-4 (1) and (5) of the Cabinet Order (Securities & Exchange Law) and Article 162 (1) (i) of the Securities & Exchange Law, both of which regulate short-selling. |
2. Non-securities business without prior approval by the FSA or notification to the FSA
The following violations of Securities & Exchange Law were found as a result of inspection conducted by the Inspection Department of the FSA.(The FSA already notified the findings to the Branch on December 19, 2001).
The Branch conducted the following non-securities businesses without prior approval by the FSA or notification to the FSA;
(1) | Credit derivative transactions. |
(2) | Intermediation of sale/purchase of interest in limited partnership and limited liability company. |
(3) | Operations for pursuing business specific entities, etc. |
(4) | Operations for pursuing business of affiliated companies other than specific entities, etc. |
(5) | Intermediation of making a silent partnership agreement among parties. |
(6) | Intermediation of cash lending/borrowing. |
(7) | Intermediation of commodity derivative transactions. |
The Branch also misrepresented the facts about the day of starting the above-listed businesses when submitting applications for approval to the FSA.
Such conducts above are found to violate the Article 34 (3) and (4) of Securities & Exchange Law applied based on 14 (1) of the Law on Foreign Securities Firms (LFSF).
3. The administrative action against the Branch
On the basis of the above findings, the FSA issued the following orders to the Branch:
(1) | Suspension of Business | ||||||
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(2) | Improvement of the compliance with the law | ||||||
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For further information, please contact with the following:
Securities Business Division
Supervisory Bureau
FSA, JAPAN (Tel : 03-3506-6000)
Deputy Director : Iichiro YOSHINO(ex.3352)
Section Chief : Yoshikazu HIRAI(ex.3356)
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