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The Securities and Exchange Surveillance Commission (SESC) conducted
the inspection of Credit Lyonnais Securities Europe-Swiss AG,
Tokyo Branch (Credit Lyonnais) based on the provisions of the
Law on Foreign Securities Firms (LFSF) and found legal violations
described below.
SESC sent the recommendation to the Financial Reconstruction
Commission (FRC) and the Commissioner of Financial Supervisory
Agency to take disciplinary action against Credit Lyonnais pursuant
to Article 29(1) of FRC Establishment Law on April 21, 2000.
(1) Provision of property gains to give customers additional
profit
On February 1st, 2000, with the involvement of the senior manager
of the Japanese equities sales division, Credit Lyonnais provided
approximately ¥640,000 property gains for the purpose of adding
to a customer's profit concerning a stock's sales after switching
the customer's stocks' sales in the session to its own account,
the company(buyer) executed the trading of these stocks with the
customers(seller) at the price higher than the value weighted
average price out of the session.
(Violation of LFSF Article 14(1))
(2) Solicitation with promise of special profit
On January 16, 1998, with the involvement of the executive senior
manager of the Japanese equities sales division, Credit Lyonnais
solicited a customer for securities index futures trading, with
a promise to the customer that the company would switch the trading
which would be produced gains on its own account to the customer's
account.(Violation of LFSF Article 17(1), which is the law before
the amendment in 1998)
(3) Submission of falsified transaction reports to customer
On September 11, 1998, with the involvement of the senior manager
of the head of operations for Japan, Credit Lyonnais deliberately
submitted the falsified reports on stock trading which resulted
from execution of individual securities option trading.
(Violation of LFSF Article 37(3), which is the law before the
amendment in 1998)
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