Press Release

June 30, 2004

Recommendation Based on the inspection results of Tokai Tokyo Securities Co., Ltd.

1. Recommendation Issued The Securities and Exchange Surveillance Commission (''SESC'') today issued 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. The recommendation is based on the results of the inspection of Tokai Tokyo Securities Co., Ltd. (located in Kyobashi, Chuo-ku, Tokyo; Okumura Masao as Representative Director and President; capitalized at approximately 36 billion yen; staffed with approximately 2,100 employees including directors; hereinafter referred to as ''Tokai Tokyo Securities''), which, as described below, found the facts constituting violations of laws and regulations by Tokai Tokyo Securities and the extremely improper acts of its employee in the course of engagement in the business as a representative. 2. Facts Found State of insufficient internal control for the prevention of unfair trade by making use of undisclosed corporate information Extremely improper acts of an employee in the course of engagement in the business as a representative Tokai Tokyo Securities states that the company has laid down in-house rules applied for controlling undisclosed corporate information, and that the Trading Supervisory Section of the company has sought to control the information in an appropriate manner and to prevent unfair trade by making use of the information. However, it was ascertained that no internal report to the Trading Supervisory Section on undisclosed corporate information as to an event of a company's share split-ups, the company being an issuer of over-the-counter securities, had been made by the Manager at Nagoya Corporate Finance Department and another employee. Consequently, the Trading Supervisory Section failed to take appropriate measures to control the information concerned. Moreover, the Manager revealed the information and other undisclosed corporate information as to events of split-ups of other over-the- counter securities issuers, which was kept by Tokai Tokyo Securities, to a Director at the Retail Service Headquarter of Iida Securities Co., Ltd.. As mentioned above, Tokai Tokyo Securities has failed to take appropriate measures to control undisclosed corporate information, and has thus been conducting its business in such a state recognized as having an insufficient internal control of undisclosed information from the viewpoint of preventing unfair trade. The aforementioned act of Tokai Tokyo Securities is acknowledged to fall under the act of conducting business under ''the state that a securities company is not deemed to have a sufficient degree of internal control for the prevention of unfair trade by making use of information pertaining to corporations, in the light of its control of information pertaining to corporations which it obtained'' provided for in Item (4), Article 10 of the Ordinance of Cabinet Office Concerning Regulation, etc. of Conducts of Securities Company based on Item (2), Article 43 of Securities Exchange Law. The aforementioned act of the employee of Tokai Tokyo Securities is acknowledged to fall under the act of ''disclosing secrets that have come to his/her knowledge in the course of the performance of his/her duties'' prescribed in Item (18), Section 3 of Article 9 of the Regulations Concerning Employees of the Securities Industry (-Fair Business Practice Regulations No.8-) established by the Japan Securities Dealers Association, and is also acknowledged, judging from the substance of the acts in question, to fall under the ''extremely improper act in the course of engagement in the business of a representative'' prescribed in Item (2), Section 1 of Article 64-5 of the Securities and Exchange law.

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