Press Release

January 7, 2005 Securities and Exchange Surveillance Commission

Recommendation Based on the Investigation and Inspection Result of UFJ Tsubasa 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 criminal investigation and inspection on UFJ Tsubasa Securities Co. Ltd. (located in Otemachi, Chiyoda-ku, Tokyo; Fujimoto Kosuke as Representative Director and President; capitalized at approximately 25 billion yen; staffed with approximately 2,960 employees including directors; hereinafter referred to as "UFJ Tsubasa Securities"), which, as described below, found the facts constituting violations of laws and regulations by UFJ Tsubasa Securities and its employee. 2. Facts Found (1) Market manipulation found by SESC's Criminal investigation of legal offences   UFJ Tsubasa Securities made selling and purchasing for a total of 355 thousand shares in Cats Corporation on the Tokyo Stock Exchange for 12 trading days between June 4 and June 20 in 2001 in collusion with other person under a prearrangement scheme that such other person would make counter transactions on the shares in the same company at the same time and at the same price.   Such act is, as a company, acknowledged to amount to the violation of Item 4 and 5, Paragraph 1 of Article 159 of the Securities and Exchange Law. The provision prohibits act of making the sale of a security in collusion with other person under a prearrangement scheme that such other person makes the purchase of such security at the same time and at the same price, and act of making the purchase of a security in collusion with other person under a prearranged scheme that such other person makes the sale of such security at the same time and at the same price with the aim of leading any other person to a misperception of the state of trading in listed securities. (2) Conclusion of contracts for discretionary-account trading found by SESC's inspection   An employee working as securities investment consultant at the sales department of Osaka office of UFJ Tsubasa Securities, from the end of July to the end of November in 2001, concluded discretionary-account trading contracts with the clients, in which the clients agreed to enable the employee to trade stocks on behalf of the clients without their consent on all aspects of trading, whether buy or sell orders were to be place, which stocks were to be traded, in what amount and at what price. Based on the contracts, the employee executed transactions without prior consent of each transaction from July 26, 2001 to February 26, 2004.   Such act is acknowledged to fall under the "act of concluding contracts for discretionary-account trading" prescribed in items, paragraph 1 of Article 42 under the Securities and Exchange Law.

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