SESC Latest Topics No.33«March 2017»

Last Updated : March 22, 2017

What’s New on the SESC Website

(Month of March 2017)

This page contains the latest in events, developments, and updates to the SESC website.

Topics

Press Releases

(Following press release is available in Japanese)

Financial Instruments Businesses etc.

March 22, 2017:

Inspection results and recommendation for an administrative action against IN CONSULTING Co., Ltd.open new window

«Summary»

Based on an inspection of IN CONSULTING Co., Ltd. (hereinafter “the Company”), a Specially Permitted Business Notifying Person, the director-general of the Kanto Local Finance Bureau identified that the Company had (i) failed to segregate funds’ assets from those of its own, (ii) misappropriated funds’ assets and (iii) had problems concerning investor protection in its business operations.
The SESC recommended that the prime minister and the commissioner of the FSA take an administrative action against the Company with respect to the findings described in (i) and (ii) above.

March 22, 2017:

Notification of Inspection Results to MAVERICK Co., Ltd.open new window

«Summary»

The director-general of the Kanto Local Finance Bureau announced the results of an inspection of MAVERICK Co., Ltd. (hereinafter “the Company”), a Specially Permitted Investment Management Business Operator.
Based on the inspection of the Company, the director-general of the Kanto Local Finance Bureau identified that the Company had had problems concerning investor protection in its business operations.


Market Misconduct

March 7, 2017:

Recommendation to impose an administrative penalty order against an employee of a subsidiary of ASAHI KASEI CORPORATION for committing insider trading related to shares of ASAHI KASEI CORPORATION.open new window

«Summary»

The SESC recommended that the prime minister and the commissioner of the FSA impose administrative penalty orders of 630,000 yen against an employee of a subsidiary of ASAHI KASEI CORPORATION.
Based on an inspection, the SESC determined that the offender had committed insider trading by purchasing shares of ASAHI KASEI CORPORATION using insider information, in violation of the Financial Instruments and Exchange Act.

March 6, 2017:

Filing criminal charges against two companies and three persons suspected of conducting fraudulent means.open new window

«Summary»

The SESC filed charges against two suspected companies and three suspects with the Chiba District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act.
Suspect B was the representative director of the suspected company named OPTI FACTOR CO., LTD (OPT) and managed its overall business. OPT substantially managed the specific purpose company named Opti-Medix Limited (OPM), which issued Medical Accounts Receivable Securitized bonds (MARS).
Suspect A was the representative director of the suspected company named Arts Securities Co., Ltd (ARTS) and managed its overall business including selling MARS and acting as an adviser and instructor of other securities firms which were distributors of MARS.
Suspects C was a director of ARTS and supported the business activities of Suspect A.
In fact, the purchasing amounts of medical accounts receivable underlining the assets of MARS named「OPTI-MEDIX Note」, distributed by OPM were far less compared with the outstanding amounts of MARS, and OPM had to use most of the investors’ money not for purchasing medical accounts receivable, but for making repayments of the principal and interest of outstanding MARS.
However, Suspects A, B and C in conspiracy in relation with the business of suspected OPM and ARTS on the occasion of selling MARS from early December 2014, to early September 2015, made employees of OPT provide false information to the three securities firms 19 times by using methods such as delivering false investment reports of MARS, which overstated the purchase amount of medical accounts receivable underlying the assets of MARS.
In addition, Suspects A, B and C in conspiracy from January 14, 2015, to around October, 2015, made employees of the four securities firms who did not know the actual investment performance of MARS solicit 13 customers of securities firms to purchase MARS (total sales amounts were 1,016 million yen) 28 times by using methods such as delivering proposals which stated that MARS was a highly secured financial product since medical accounts receivable underlying the assets of MARS were repaid by public institutions.
Consequently, Suspects A, B and C conducted fraudulent means for the purpose of trading securities.
The SESC appreciates the assistance of the Monetary Authority of Singapore and the U.S. Securities and Exchange Commission in this matter.

February 24, 2017:

Recommendation to impose administrative penalty orders against an officer and nine employees of Morpho, Inc., including seven members of Morpho, Inc. employees’ stock ownership association (hereinafter referred to as “the association”), for committing insider trading related to shares of Morpho, Inc.open new window

«Summary»

The SESC recommended that the prime minister and the commissioner of the FSA impose administrative penalty orders against an officer and nine employees, including seven members of the association of Morpho, Inc. as follows.
Based on an inspection, the SESC determined that offenders (1)–(3) had committed insider trading by purchasing shares of Morpho, Inc., and that offenders (4)–(10) had committed insider trading by purchasing shares of Morpho, Inc. through the association by increasing contributions for or admission to the association using the insider information, in violation of the Financial Instruments and Exchange Act.
 
1,330,000 yen against an officer (offender (1))
1,720,000 yen against an employee (offender (2))
12,280,000 yen against an employee (offender (3))
40,000 yen against an employee (offender (4))
50,000 yen against an employee (offender (5))
90,000 yen against an employee (offender (6))
110,000 yen against an employee (offender (7))
40,000 yen against an employee (offender (8))
20,000 yen against an employee (offender (9))
20,000 yen against an employee (offender (10))

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