Press Release
September 10, 2004
Securities and Exchange Surveillance Commission

Recommendation Based on the Inspection Result of
Cantor Fitzgerald Shoken Kaisha Ltd.


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 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 Cantor Fitzgerald Shoken Kaisha Ltd. (Tokyo Branch, located in Kasumigaseki Chiyoda-ku Tokyo; Teruyuki Fujino as a Branch Manager in Japan; staffed with approximately 30 employees including directors; hereinafter referred to as ''Cantor Fitzgerald''), which, as described below, found the facts constituting violations of laws and regulations by Cantor Fitzgerald and its employees.


2. Facts Found

A Senior Vice President & Manager and an employee of Japanese Government Bonds division of Cantor Fitzgerald, from May 2002 to July 2003 and from July 2002 to August 2002, respectively, had, in the course of business, executed several customers' orders by acting as a broker and at the same time as a principal for several times.

The aforementioned act of the two persons mentioned above is acknowledged to fall under the act of ''acting as a principal and at the same time as a broker of the other party in consummating sale or purchase of securities'' prescribed in Article 39 of the Securities and Exchange Law, which is applied to Paragraph 1 of Article 14 of the Law on Foreign Securities Firms.

Six other employees had, in pursuing their business, also executed customers' orders with their own accounts. The act of eight persons in total is considered to be that of the company, thus, Cantor Fitzgerald as a company is also acknowledged to amount to the violation of Paragraph 1 of Article 14 of the Law on Foreign Securities Firms.

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