The Securities and Exchange Surveillance Commission (SESC) conducted
an inspection of Mizuho Securities Co., Ltd. (Mizuho) based on
provisions of the Securities and Exchange Law (SEL), and found
legal violations described below.
Today, the SESC sent a recommendation to the Prime Minister
and the Commissioner of Financial Services Agency (FSA) to take
a disciplinary action against Mizuho pursuant to Article 20(1)
of the FSA Establishment Law.
- Front running
From January 2000 to February 2001, traders in Mizuho had been
executing orders from customers as well as dealing business
for Mizuho itself. As a result, Mizuho often carried out securities
transactions of the stock ordered by customers, for its own
account, at better prices, prior to customers' f orders were
(Violation of Article 42(1)(viii) of the SEL)
- Selling underwriting securities to a parent company
From August 1999 to November 2000, Mizuho sold securities underwritten
by itself to parent companies within six months from the dates
when Mizuho underwrote those securities.
(Violation of Ministerial Ordinance, Article 45(3) of the SEL)