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1. Recommendation Issued
The Securities and Exchange Surveillance Commission today
issued a recommendation that the Prime Minister and the Commissioner of
the Financial Services Agency (FSA) take administrative disciplinary
action pursuant to Paragraph 1 of Article 20 of the FSA Establishment
Act based upon the results of the inspection of Norinchukin Securities
Co., Ltd. (located in Otemachi, Chiyoda-ku, Tokyo; Representative
Officer, President Toyomu Ueki; capitalized at 30 billion yen; staffed
with 120 employees including directors), which found the following facts
constituting violations of laws and regulations by Norinchukin
Securities Co., Ltd.
2. Facts Found
- Failure to inform customers that net proceeds
derived from sale of a security underwritten by a securities company
will be used by the issuer of the security for repayment of
liabilities for borrowings from a parent juridical person, etc. of the
securities company
Norinchukin Securities Co., Ltd.,
from November 2000 to December 2002, sold to customers securities which
were issued by those persons who had borrowings from its parent
juridical person and underwritten by itself, knowing but without telling
the customers an extremely high possibility that the net proceeds
derived from selling the securities would be used by the issuers of the
securities for repayment of such borrowings.
The foregoing is acknowledged to fall under the "act of a
securities company to sell to a customer a security which is issued by a
person who has liabilities for borrowings from a parent juridical
person, etc. of the securities company and underwritten by the
securities company, knowing but without telling the customer the
circumstances under which the net proceeds derived from such sale of the
security will be used by the issuer of the security for repayment of
such liabilities for borrowings" provided for in Item (1), Paragraph 1
of Article 12 of the Ordinance of Cabinet Office Concerning Regulation,
etc. of Conducts of Securities Company based upon Item (3), Article 45
of the Securities and Exchange Law.
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