|March, 20 1998|
other appropriate measures against Nikko, pursuant to Article 191) of Ministry of Finance Establishment Law on March 20, 1998.
1. Providing property gains to compensate for losses Nikko, by involvement of two then board members including the vice president, for the purpose of compensating for a part of a customer's losses incurred in securities trading, offered the customers :
1) approximately ¥6,800,000 in total by disguising its own profitabale securities tractions with an already fixed profit as
the customer's transactions six times between October 1995 and
2. Entering into an agreement to make discretionary trading account to decide, without customer consent for each transaction, whether to purchase or sell, and what issues of shares to be purchased or sold in what number and at what prices, and executed the customer's order based on this agreement from October 1995 to March 1997.
II. The SESC conducted the inspection of Nikko Securities Co. (Nikko) and found the legal violation as described below.
and other appropriate measures against Nikko pursuant to Article 19(1) of Ministry of Finance Establishment Law on March 20, 1998. not reflect the market realities.
On October 31, 1997, Nikko failed to execute the purchase order of specific stock which was supposed to be executed at opening price. It was afternoon when Nikko found the failure and at that time the market price of the stock was higher than the opening price. Under this situation it was difficult for Nikko to purchase the stock at the same price as the opening price.
Therefore, Nikko, by involvement of the then chief of over the counter stock division, continued to place sell orders at lower price between 2:49pm and 2:52pm for the purpose of driving down the price to the opening price so that the sell order on his own account could be matched with purchase order of the customer at the opening price.
(violations of ministerial ordinance, according to SEL Article 50(1))