1. Act of making representation of a
misleading statement on material matter in connection with handling of private
placements of securities
In the Marunouchi Branch of the registered financial institution, which handles
private placement of structured bonds of which conditions vary among each
customer depending on preference of investment, the following cases of making
representation of a misleading statement on material matters in connection with
its handling of private placement were found.
(Case One)
Vice President A of the Marunouchi Branch, on June 4 and August 28, 2003, made
representation of a misleading statement in soliciting structured bonds to two
customers, as if the customers could sell out the bond at a certain price
anytime before the maturity date, while it was in fact difficult to do so
because of the low level of liquidity.
(Case Two)
Vice President B of the Marunouchi Branch, on July 4, 2003, made representation
of a misleading statement in soliciting structured bonds to a customer, as if
the customer could receive interests for certain without risking the principal,
while there were in fact possibilities of impairing the principal as well as not
being able to receive interests because of the fluctuation of exchange rate.
2. Act of handling private placement as a condition of granting credit
In the Marunouchi Branch of the registered financial institution, the following
case of the act of handling private placement as a condition of granting credit
was found.
(Case)
An employee of the Marunouchi Branch, in April 2003, solicited the offer of
acquiring structured bonds to a customer and at the same time proposed the same
customer an increase of the amount of a loan to be appropriated for the cost of
purchasing the bonds, making the purchase of the bonds a condition for providing
the loan.
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