(Provisional Translation)
June 19, 2015
Securities and Exchange Surveillance Commission
Recommendation for Administrative Monetary Penalty Payment Order for Insider Trading by Officer of Party in Negotiation to Conclude Contract with Gokurakuyu Co., Ltd.
1. Contents of the Recommendation
The Securities and Exchange Surveillance Commission ("SESC"), 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 insider trading by an officer of a party in negotiation to conclude a contract with Gokurakuyu Co., Ltd. pursuant to Article 20(1) of the Act for Establishment of the Financial Services Agency. This recommendation is based on the findings of the investigation into the insider trading, whereby the following violations of laws and ordinances were identified.
2. Summary of the Findings Regarding Violations of the Laws and Ordinances
The person subject to the administrative penalty payment order, in regard to the negotiation for a contract with Gokurakuyu Co., Ltd. ("Gokurakuyu"), with the knowledge of the material fact that the responsible body for making decisions of Gokurakuyu had decided to conclude the contract for a business alliance, from April 15, 2014 to 2:07 p.m. on May 27, 2014, which period is prior to the publication of the material fact issued at 3:00 p.m. on May 27, 2014, purchased a total of 17,500 shares of Gokurakuyu for 7,180,200 yen through the person's own account.
The actions mentioned above conducted by the person subject to the administrative penalty payment order were recognized as actions "in violation of the provisions of Article 166(1) or (3) in effecting a Purchase and Sale, etc. prescribed in Article 166(1)" as stipulated under Article 175(1) of the Financial Instruments and Exchange Act ("FIEA").
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 violations is 920,000 yen.
Details of the calculation are presented in the Attachment.
4. Others
We appreciate assistance of the Financial Supervisory Commission of Taiwan in this matter.
Attachment
● Method of Calculation of the Amount of the Administrative Monetary Penalty
Pursuant to Article 175(1) of the FIEA, the amount of the administrative monetary penalty shall be the amount obtained by deducting the amount specified in item (b) below from the amount specified in item (a) below:
(a) The amount obtained by multiplying the highest price in the two weeks after the publication of the material fact by the volume of the purchase, etc. of securities
(b) The amount obtained by multiplying the price at which the person effected the purchase, etc. by the volume of the purchase, etc. of securities
As the highest price of Gokurakuyu share in the two weeks after the publication of the material fact was 463 yen, the amount of the administrative monetary penalty is calculated as below:
(463 yen x 17,500 shares) - (Value pertaining to purchase of 7,180,200 yen) (*)
= 922,300 yen
Pursuant to Article 176(2) of the FIEA, the amount of the administrative monetary penalty shall be 920,000 yen, which is rounded down to the nearest ten-thousand.
(*) Value pertaining to purchase is calculated as below:
(406 yen x 1,200 shares + 407 yen x 1,100 shares + 408 yen x 2,300 shares + 409 yen x 700 shares + 410 yen x 5,800 shares + 411 yen x 500 shares + 412 yen x 3,200 shares + 413 yen x 700 shares + 414 yen x 400 shares + 415 yen x 1,600 shares)