Press Release
April 27, 2001

The Securities and Exchange Surveillance Commission (SESC) conducted an inspection of Nikko Securities Co., Ltd. (Nikko) based on provisions of the Securities and Exchange Law (SEL), 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 Nikko pursuant to Article 20(1) of the FSA Establishment Law.

  1. Misstatements concerning securities and other transactions

    From April 1996 to October 1997, Nikko sold foreign bonds to many corporate customers. With the involvement of a section chief and other staff of the Bond Trading Division, Nikko misstated an explanatory note, which is a sales material, on contents of foreign securities of the bonds, and issued it to the customers. Those misstatements were about a counter party of a currency swap and the preference of redemption.

    (Violation of a Ministerial Ordinance, Article 50(1)(vi) of the SEL prior to the amendment of December 1, 1998)
  2. Provision of property gains to increase gains

    From October 1 to 6, 1999, with the involvement of a section chief of the Nishinomiya branch, Nikko provided property gains for a customer on the purpose of increasing the customer's gains by distributing IPO stocks, intentionally. In fact, those stocks had been expected to rise, and the branch had only a few units of the stocks to be distributed.

    (Violation of Article 42-2 (1)(iii) of the SEL)

Recommendations to the FSA | top