(Provisional Translation)
June 19, 2014
Securities and Exchange Surveillance Commission

Recommendation for Administrative Monetary Penalty Payment Order for Violation of Disclosure Requirements by JAPAN ASSET MARKETING CO. LTD.


1. Contents of the Recommendation

The Securities and Exchange Surveillance Commission, today, made a recommendation to the prime minister and the commissioner of the Financial Services Agency that an administrative monetary penalty payment order be issued in regard to misstatements of financial reports on material issues by JAPAN ASSET MARKETING CO. LTD. (“JAPAN ASSET MARKETING”), pursuant to Article 20(1) of the Act for Establishment of the Financial Services Agency. This recommendation is based on the findings of the disclosure statements inspection of the company, whereby the following violations of laws and ordinances were identified.

2. Summary of the Findings Regarding Violations of Laws and Ordinances

(i) JAPAN ASSET MARKETING, whose registered office is located at 2-6-18, Minami-Aoyama, Minato-ku, Tokyo, is a firm engaged in real estate business including letting real properties. JAPAN ASSET MARKETING submitted to the Director-General of the Kinki Local Finance Bureau its annual securities report containing false statements on material issues by overstating sales whose amount includes that of an agency fee on a sham selling agent contract paid for the purpose of repaying the buyer, as stipulated under Article 172-4(1) of the Financial Instruments and Exchange Act (FIEA), as described in the table below.

Submission date Document False Statement
Accounting period Document related to financial calculation Content (note) Type
June 28, 2012 Annual securities report for consolidated accounting period of the 13th business year (Annual securities report for fiscal year ended March 2012) Consolidated accounting period from April 1, 2011, to March 31, 2012 Consolidated income statement Net sales were found to be 83 million yen, but were stated as 103 million yen. Overstating net sales

Note: Rounded down to the nearest million yen.

(ii) JAPAN ASSET MARKETING submitted to the Director-General of the Kinki Local Finance Bureau its offering disclosure documents as listed below, which contain false statements on material issues, as stipulated in Article 172-2 (1) of FIEA, through the offering based on the offering of disclosure documents:

1) its securities registration statement (share option certificates) incorporating the annual securities report for fiscal year ended March 2012 (see the table above), which contained false statements on material issues, on September 7, 2012, and had others acquire its 342 share option certificates at the amount of 302,642,640 yen, through the offering based on the above-mentioned registration statement;

2) its securities registration statement (common stock shares) incorporating the annual securities report for fiscal year ended March 2012 (see the table above), which contained false statements on material issues, on September 7, 2012, and had others acquire its 379,746 shares at the amount of 299,999,340 yen, through the offering based on the above-mentioned registration statement;

3) its securities registration statement incorporating the annual securities report for fiscal year ended March 2012 (see the table above), which contained false statements on material issues, on March 1, 2013, and had others acquire its 1,300,000 shares at the amount of 1,690,000,000 yen, through the offering based on the above-mentioned registration statement.

3. Calculation of the Amount of the Administrative Monetary Penalty

Pursuant to the FIEA, the amount of the administrative monetary penalty applicable to the above violation is 109,150,000 yen.

Contact

Securities and Exchange Surveillance Commission

E-mail: question_sesc@fsa.go.jp

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