|August 19, 2003|
Mizuho Investors Securities Co., Ltd.
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 action and other appropriate measures pursuant to Paragraph 1 of Article 20 of the FSA Establishment Act based upon the results of the inspection of Mizuho Investors Securities Co., Ltd. (hereinafter referred to as ''the company'') (located in Chuo-ku, Tokyo; Taira Hosaka as President; with equity capital of 80.2 billion yen; staffed with approximately 2,100 employees including directors) that ascertained the following facts constituting violations of laws and regulations by the company and its employee.
2. Facts Ascertained
- producing a material for solicitation wherein contains a simulated data of annual rate of return, i.e. 27%, which almost lacks realization possibility, without clear description of precondition,
- producing a list of investment performance which does not properly reflect the investment result of the customers by neglecting to state the unrealized investment losses regarding ETFs for each customer, and
- delivering or showing these materials to many personal investors who are inexperienced in option transaction.
The foregoing acts of the company and its employee are acknowledged to fall under the ''act of making representation of a misleading statement on any material matter in connection with the sale or purchase of, or any other form of transaction in, a security and trade in options contracts on a security, etc'' provided for in Item (1), Article 4 of the Ordinance of Cabinet Office Concerning Regulation, etc. of Conducts of Securities Company based upon Item 9, Paragraph 1 of Article 42 under the Securities and Exchange Law.
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