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The Securities and Exchange Surveillance Commission (SESC) conducted
inspections of UBS Warburg Securities (Japan) Limited, Tokyo Branch
(UBS Securities) and Commerz Securities (Japan) Company Limited,
Tokyo Branch (Commerz Securities), based on provisions of the
Law on Foreign Securities Firms (LFSF), and found legal violations
by employees of the both companies as described below.
Today, the SESC sent recommendations to the Prime Minister and
the Commissioner of Financial Services Agency (FSA) to take appropriate
actions pursuant to Article 20(1) of the FSA Establishment Law.
Act of making a series of securities transactions to create artificial
market prices which does not reflect the actual state of the market
- UBS Securities
In relation to an Equity Exchangeable Bond (EB) for stocks of
a listed company, for the purpose of lowering the stock price,
an equities trader sold the stocks by placing a series of lower
limit or no limit orders from 14:59 until the close on May 10,
2000. In fact whether additional interests (bonus coupon) of
the EB were payable was dependent upon the stock price on the
very date of May 10, 2000. As a consequence of the deliberate
selling, the stock price fell short of the benchmark price for
additional interests, and the payment worth approximately 70
million-yen could be avoided.
- Commerz Securities
In relation to another EB for stocks of a listed company, for
the purpose of lowering the stock price, equities traders sold
the stocks by placing a series of lower limit orders from 14:58
until the close on August 15, 2000. In fact whether additional
interests (bonus coupon) of the EB were payable was dependent
upon the stock price on the very date of August 15, 2000. As
a consequence of the deliberate selling, the stock price fell
short of the benchmark price for additional interests, and the
payment worth approximately 77 million-yen could be avoided.?(Violation
of a Ministerial Ordinance, Article 42(1)(ix) of the Security
and Exchange Law including the application of Article 14(1)
of the LFSF)
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