SECURITIES AND EXCHANGE SURVEILLANCE COMMISSION

The Securities and Exchange Surveillance Commission (SESC) conducted the inspection of Dresdner kleinwort Benson (Asia) Limited, Tokyo Branch (Dresdner) 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 Dresdner pursuant to Article 181) of Financial Supervisory Agency Establishment Law on November 13, 1998.

(Submitting transaction reports containing false statements to customers)

From August 1997 to July 1998, the employees of the domestic section and other sections of Dresdner informed certain customers of the wrong prices which were different from the market prices by mistake (18orders).

After informing to the customers of the prices of their orders, Dresdner got to find that the prices were wrong by checking up the prices informed to the customers and the execution prices written on the transaction reports from the Tokyo stock exchange.

Although Dresdner realized that there were mistakes among the prices which had been informed to the customers. Dresdner did not try to inform to their customers of their mistakes because Dresdner thought if their customers had realized its mistakes it would have loosen its reputations among customers.

For this reason Dresdner switched the customers' transactions truly executed in the market to the transactions on their own account and applied to the stock exchange for "corrections of errors" to make other transactions off the session to make up the customers' transactions with them and finished the deals of the customers so that the off-the-session transactions would seem to be true ones. As a result, Dresdner made up false reports of them and sent them to the customers.

(Violation of LFSF Article 37(3))

Recommendations to the FSA | top