The Securities and Exchange Surveillance Commission (SESC) conducted
an inspection of CIBC World Markets (Japan) Inc., Tokyo Branch
(CIBC), based on provisions of the Law on Foreign Securities Firms
(LFSF), and found legal violations described below.
Today, the SESC sent a recommendation to the Prime Minister and
the Commissioner of Financial Services Agency (FSA) to take a
disciplinary action against CIBC pursuant to Article 20(1) of
the FSA Establishment Law.
Solicitation with promise of special profit
- In November 1997, CIBC proposed a corporate customer a scheme
to defer a loss of a note, which was nearly of no value at this
time, with adding new fund. In this scheme, a pecuniary profit
was also promised to be provided to the customer. Consequently
the whole process was purported to avoid the realization of
a loss from the original note.
- In October 1998, CIBC also promised a corporate customer
that, when it made an advance payment for a new note to a checking
account in a CIBC-affiliated bank, CIBC would add interests
upon the new note, corresponding to the duration of the deposit,
in fact that the checking account itself does not normally produce
(Violation of a Ministerial Ordinance, Article 50 (1) (vi) of
the Security and Exchange Law, including the application of Article
17 (1) of the LFSF prior to the amendment of December 1st 1998