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1. Recommendation Issued
The Securities and Exchange Surveillance Commission (SESC) issued
today a recommendation that the Prime Minister and the
Commissioner of the Financial Services Agency (FSA) take
administrative disciplinary actions pursuant to Paragraph 1 of
Article 20 of the FSA Establishment Act based upon the results of
the inspection of Dresdner Kleinwort Wasserstein (Japan) Limited,
Tokyo Branch (hereinafter referred to as ''Dresdner Kleinwort
Wasserstein Securities''; located in Toranomon, Minato-ku, Tokyo;
with Jean François Minier its Japan's representative; holding
membership of Tokyo and Osaka Stock Exchanges; staffed with
approximately 330 employees including directors) that ascertained
the following facts constituting violations of laws and
regulations.
2. Facts Ascertained
Short Sale in Violation of the Provisions of a Cabinet Order
Dresdner Kleinwort Wasserstein Securities :
(1) from April 2001 to February 2002, accepted orders from a
customer for the sale of numerous issues of stocks that the
customer did not own, without individually confirming the customer
who placed the sell orders with it whether or not the sale was a
short one, and on these accepted orders, gave no explicit
indication to stock exchanges that the sale of the stocks to be
made in the exchange securities market was a short one. These acts
are acknowledged to be against Paragraphs 1 and 2 of Article 26-3
under the Cabinet Order for Enforcement of the Securities and
Exchange Law.
(2) from December 2001 to February 2002, for its own account, gave
no explicit indication to stock exchanges, etc. whether or not the
sale of more than one issue of stocks to be made in the exchange
securities market, etc. was a short one. This act is acknowledged
to be against Paragraph 1 of Article 26-3 under the Cabinet Order
for Enforcement of the Securities and Exchange Law (including
cases that the same paragraph apply to mutatis mutandis in
accordance with Paragraph 6 of the same article).
(3) in connection with the above acts mentioned in (1) and (2),
made a large number of short sales in the exchange securities
market for its own account or on orders accepted from the customer
at a price lower than the price of the stocks in the exchange
securities market which was published immediately prior to the
short sale by the securities exchanges. This act is acknowledged
to be against Paragraph 1 of Article 26-4 (as it used to be before
the last amendment to the article by Cabinet Order No. 37 in 2002)
under the Cabinet Order for Enforcement of the Securities and
Exchange Law.
All the above acts mentioned in (1), (2) and (3) are acknowledged
to be ''Act of making the sale of a security without owning such
security in violation of the provisions of a Cabinet Order''
provided for in Item 1, Paragraph 1 of Article 162 under the
Securities and Exchange Law.
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