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The Securities and Exchange Surveillance Commission (SESC) conducted
the inspection of Instinet Japan Limited Tokyo Branch (Instinet)
based on the provisions of the Law on Foreign Securities Firms
(LFSF) and found legal violations described below.
The SESC sent recommendation to the Prime Minister and the Commissioner
of Financial Supervisory Agency to take disciplinary action against
Instinet pursuant to Article 18(1) of Financial Supervisory Agency
Establishment Law on October 12, 1998.
(Submitting transaction reports containing false statements to
customer)
On May 18th, 1998 Instinet received sell order of over the
counter stock from a customer and Instinet ordered sell order
of over the counter stock from the agency.
At first, the chief of a section Trading Division informed the
customer of wrong contents of transaction . Later, he noticed
real contents of transaction when he confirmed contents of transaction
from the agency.
But he did not want the customer to know his mistake. In this
reason, after getting understanding of the head of the Trading
Division, he did not contact the customer to correct.
And he inputted the price which was different from the real execution
price to a computer deliberately. Consequently, the company submitted
transaction reports containing false statements based on these
wrong data.
(Violation of LFSF Article 37(3))
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