SESC Latest Topics No.7 «December 2014»

Last Updated : December 26, 2014

Recommendation for Administrative Monetary Penalty Payment Order for Market Manipulation by Areion Asset Management Company Limited

Notification of Inspection Results to Winvol Co., Ltd, and three other associated companies.

«Summary»

The SESC notified Winvol Co., Ltd., Winvol Station LLC., Winvol Dream LLC., and Winvol Falcon LLC. (the companies), each being a Specially Permitted Business Notifying Person, of the results of an inspection of the companies. Based on the inspection, the SESC identified that the companies have engaged in a diversion of invested funds, and in inappropriate solicitation of investors to the funds’ equities.

Recommendation for an administrative action against Next Trust Co., Ltd.

«Summary»

The SESC recommended the Prime Minister and the Commissioner of the FSA to take an administrative action against Next Trust Co., Ltd. (the Company), an Investment Advisory and Agency Business Operator, and a Type II Financial Instruments Business Operator. Based on an inspection of the Company, the SESC identified that the company had another person engage in intermediary service for a Discretionary Investment Contract under the name of the company.

Filing criminal charges against a person suspected of committing market manipulation in violation of the Financial Instruments and Exchange Act

«Summary»

The SESC filed charges with the Kobe District Public Prosecutors Office for a case in relation to the shares of Fonfun Co., Ltd., listed on the Osaka Securities Exchange. In an attempt to raise the price of the shares and to induce active trading in the shares, the suspect purchased the shares under the name of another person to cause other market participants to have the misconception that the shares were being traded actively in the market, and did a series of trades to raise the market price of the shares artificially. Moreover, for the purpose of causing other market participants to have misconceptions regarding the trading of the shares, including the misconception that the shares were being traded actively in the market, the suspect conducted wash trade (Kasou) transactions of the shares by matching buying and selling orders at the same time without the purpose of transferring rights under the name of his wife and the name of another person. As a result of these orders, the price of the shares went up and the suspect sold the shares at a profit under the name of his wife and the name of another person.

Recommendation to impose an administrative penalty order against an offender who received insider information from an officer of WirelessGate, Inc. and committed insider trading related to shares of WirelessGate, Inc.

«Summary»

The SESC recommended the Prime Minister and the Commissioner of the FSA to impose an administrative penalty order of 520,000 yen against an offender who received insider information from an officer of WirelessGate, Inc. 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 WirelessGate, Inc.using the insider information.

Recommendation to impose an administrative penalty order against an offender who received insider information from an employee of a negotiator of a tender offeror for committing insider trading related to shares of Hitachi Medical Corporation．

«Summary»

The SESC recommended the Prime Minister and the Commissioner of the FSA to impose an administrative penalty order of 440,000 yen against an offender who received insider information from an employee of a negotiator of a tender offeror by a 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 Hitachi Medical Corporation using the insider information.

Recommendation to impose an administrative penalty order against an offender who received insider information from a negotiator of a tender offeror for committing insider trading related to shares of CHIMNEY CO., LTD.

«Summary»

The SESC recommended the Prime Minister and the Commissioner of the FSA to impose an administrative penalty order of 440,000 yen against an offender who received insider information from a negotiator of a tender offeror by a 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 CHIMNEY CO., LTD. using the insider information.

Recommendation to impose an administrative penalty order against an offender who committed market manipulation related to shares of ISE CHEMICALS CORPORATION.

«Summary»

The SESC recommended the prime minister and the commissioner of the FSA to impose an administrative penalty order of 1,050,000 yen against a person 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 oppositely selling the shares of ISE CHEMICALS CORPORATION at a higher price than the contracted price.
The offender intended to mislead the market into believing that sales and purchase of the shares of ISE CHEMICALS CORPORATION were thriving, and to cause fluctuations in market prices to be in his/her favor.

Recommendation to impose an administrative penalty charge against JALCO Holdings Inc. for making false statements in disclosure documents

«Summary»

The SESC recommended that the prime minister and the commissioner of the FSA impose an administrative penalty charge of 151,500,000 yen against JALCO Holdings Inc. ("the company"). Based on an inspection of the company's disclosure statements, the SESC has determined that the company made false statements in its Ongoing Disclosure Documents and Offering Disclosure Documents, which presented overstated sales amounts, etc. at a subsidiary of the company entering into installment sales contracts without underlying sales transactions in reality.