SESC Latest Topics No.6 «October 2014»

Last Updated : October 31, 2014

Court injunction against ES plus Co., Ltd. and its manager.

«Summary»

In response to a petition filed on September 12, 2014, by the SESC with the Nagoya District Court for an injunction against ES plus Co., Ltd. and its manager to prohibit and suspend its solicitation of shares in collective investment schemes, a court order was issued as per the content of the petition.

Recommendation for an administrative action against Real Capital Management Co., Ltd.

«Summary»

The SESC recommended the Prime Minister and the Commissioner of the FSA to take an administrative action against Real Capital Management Co., Ltd. (the Company), a Type II Financial Instruments Business Operator, and an Investment Advisory and Business Operator. Based on the inspection of the Company, the SESC identified that the company engaged in deceitfully acting as if the Company had received investments from Qualified Institutional Investors, and having another person solicit investors to the funds’ equities in the name of the Company, and that it did not deliver documents required by law, and it did not have a personnel structure sufficient to conduct Financial Instruments Business in an appropriate manner.

Notification of Inspection Results to Clean Control Vietnam LLC

«Summary»

The directors-general of the Kanto Finance Bureau notified Clean Control Vietnam LLC (the Company), a Specially Permitted Business Notifying Person, of inspection results. Based on an inspection of the Company, the directors-general of the Kanto Finance Bureau identified that the Company has engaged in Type II Financial Instruments Services without statutory registration, soliciting investors to the funds’ equities in the name of a Financial Instruments Business operator, and a diversion of an invested funds.

Recommendation to impose an administrative penalty order against an offender who comitted market manipulation related to shares of Kawaguchi Chemical Industry Co., LTD.

«Summary»

The SESC recommended the prime minister and the commissioner of the FSA to impose an administrative penalty order of 930,000 yen against an offender who committed market manipulation in violation of the Financial Instruments and Exchange Act.
The SESC determined, based on an inspection, that the offender committed market manipulation for two days by consecutively purchasing the shares of Kawaguchi Chemical Industry Co., LTD. at a higher price than the contracted price, and purchasing a large amount of shares of Kawaguchi Chemical Industry Co., LTD. to sustain the price of shares.
The offender intended to mislead the market into believing that sales and purchase of the shares of Kawaguchi Chemical Industry Co., LTD. were thriving, and to cause fluctuations in market prices to be in his/her favor.

Recommendation to impose an administrative penalty order against an offender who received insider information from an employee of Yume no Machi Souzou Iinkai Co., Ltd. for committing insider trading related to shares of Yume no Machi Souzou Iinkai Co., Ltd.

«Summary»

The SESC recommended the prime minister and the commissioner of the FSA to impose an administrative penalty order of 2,560,000 yen against an offender who received insider information from an employee of Yume no Machi Souzou Iinkai Co., Ltd. in violation of the Financial Instruments and Exchange Act.
The SESC determined, based on an inspection, that the offender committed insider trading by purchasing shares of Yume no Machi Souzou Iinkai Co., Ltd. using the insider information.

Filing criminal charges against day traders suspected of committing market manipulation using techniques such as false buying and selling offers in violation of the Financial Instruments and Exchange Act

«Summary»

The SESC filed charges with the Tokyo District Public Prosecutors Office for a case in relation to the shares of four companies listed on the Tokyo Stock Exchange. The two suspects conspired to purchase and sell the shares, with the aim of raising the share prices to gain profits. Firstly, upon creating a situation in which demand for selling the shares was strong, they purchased the shares at the low price level by means of inducing other market participants to make sales orders. Then, upon creating a situation in which demand for purchasing the shares was strong, they raised the market prices of the shares by inducing other market participants to make purchase orders. Taking advantage of the market fluctuations they thus caused, the suspects sold their shares at a profit.