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Recommendation for Administrative Monetary Penalty Payment Order for Insider Trading in Shares of NIPPO Corporation by an Individual Residing Abroad
1. Contents of the Recommendation
The Securities and Exchange Surveillance Commission today made a recommendation to the Prime Minister and the Commissioner of the Financial Services Agency that an administrative monetary penalty payment order be issued with respect to insider trading in shares of NIPPO Corporation (“NIPPO”; delisted on March 29, 2022) by an individual residing abroad who received information from employees of the tender offeror, pursuant to Article 20(1) of the Act for Establishment of the Financial Services Agency. This recommendation is based on the findings of an investigation into a suspected instance of insider trading, whereby the following violation of laws and ordinances was identified.
2. Summary of the Findings Regarding Violation of Laws and Ordinances
The individual subject to the administrative monetary penalty payment order (residing in the Republic of Korea), was an employee of a foreign subsidiary of The Goldman Sachs Group, Inc. (“GS Global”).
The individual was informed of material non-public information (“MNPI”) that the decision-making body of GS Global had decided to commence a tender offer for NIPPO by employees of GS Global’s Japanese subsidiary, who had become aware of the MNPI in the course of their duties in connection with GS Global.
The individual then purchased a total of 19,100 shares of NIPPO for 60,274,790 yen through a brokerage account in the name of a relative, for the account of that relative, during the period from August 18 to September 3, 2021, prior to the public announcement of the tender offer.
The individual was informed of material non-public information (“MNPI”) that the decision-making body of GS Global had decided to commence a tender offer for NIPPO by employees of GS Global’s Japanese subsidiary, who had become aware of the MNPI in the course of their duties in connection with GS Global.
The individual then purchased a total of 19,100 shares of NIPPO for 60,274,790 yen through a brokerage account in the name of a relative, for the account of that relative, during the period from August 18 to September 3, 2021, prior to the public announcement of the tender offer.
A summary of the findings is shown in the
Chart.
The individual’s aforesaid conduct was found to constitute “effecting a purchase, etc. involving the specified share certificates, etc. or related share certificates, etc. set forth in Article 167(1) in violation of the provisions of Article 167(3)” as stipulated under Article 175(2) of the Financial Instruments and Exchange Act (“FIEA”).
3. Calculation of the Amount of the Administrative Monetary Penalty
Pursuant to the FIEA, the amount of the administrative monetary penalty applicable to the above violation is 18,990,000 yen.
Details of the calculation are shown in the
Attachment.)
Details of the calculation are shown in the
Attachment.)
4. Acknowledgements
We appreciate the assistance of the Hong Kong Securities and Futures Commission, the Financial Services Commission/Financial Supervisory Service of Korea, and Japan Exchange Regulation in this matter.
