SESC Latest Topics No.13«June 2015»

Last Updated : June 30, 2015

Notification of Inspection Result to Meiwa Co., Ltd.

«Summary»

The Director-General of the Kanto Local Finance Bureau announced the results of the inspection of Meiwa Co., Ltd. (the Company) a Specially Permitted Business Notifying Person.

Based on the inspection of the Company, the Director-General of the Kanto Local Financial Bureau identified that it evaded the inspection and failed to make a report or submit materials.

Notification of Inspection Results to MP Japan Co., Ltd.

«Summary»

The Director-General of the Kanto Local Finance Bureau announced the results of an inspection of MP Japan Co., Ltd. (“the Company”), a Specially Permitted Business Notifying Person.

Based on the inspection of the Company, the Director-General of the Kanto Local Finance Bureau identified that it has (i) made false statements to customers in relation to the conclusion of financial instrument transaction contracts and their solicitation, (ii) diverted money contributed to the funds in order to pay the Company’s expenses, dividends, and redemption to customers, (iii) responded with a false reporting to an order for production of reports, and (iv) engaged in type II financial instruments operations without statutory registration.

Recommendation for administrative action against Crowd Securities Japan, Inc.

«Summary»

The SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative action against Crowd Securities Japan, Inc. (“the Company”), a Type I and II Financial Instruments Business Operator.

Based on the inspection of the Company, the SESC identified that it has not appropriately managed the client assets by classification.

Recommendation for administrative action against ProgressMind Co., Ltd.

«Summary»

The SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative action against ProgressMind Co., Ltd. (“the Company”), an Investment Advisor/Agency and a Specially Permitted Business Notifying Person.

Based on an inspection of the Company, the SESC acknowledged that the situation is the case where it is “necessary and appropriate for the public interest or protection of investors,” as stipulated under Article 51 of the Financial Instruments and Exchange Act.

Recommendation for an administrative action against TAPJAPAN Co., Ltd.

«Summary»

The SESC recommended that the Prime Minister and the Commissioner of the FSA take an administrative action against TAPJAPAN Co., Ltd. (“the Company”), an Investment Advisor/Agency, a Specially Permitted Business Notifying Person.

Based on an inspection of the Company, the SESC acknowledged that the situation is the case where it is “necessary and appropriate for the public interest or protection of investors,” as stipulated under Article 51 of the Financial Instruments and Exchange Act.

Notification of Inspection Result to Allied Investment Co., Ltd.

«Summary»

The Director-General of the Kanto Local Finance Bureau announced the results of an inspection of Allied Investment Co., Ltd. (“the Company”) a Specially Permitted Business Notifying Person.
Based on an inspection of the Company, the Director-General of the Kanto Local Finance Bureau identified that it has engaged in Type II financial instruments operations without statutory registration, and in a diversion of invested funds.

Filing criminal charges against Ishiyama Gateway Holdings Inc. and its managements for fraudulent practices regarding a false disclosure

«Summary»

The SESC filed charges against the suspected company and two suspects with the Tokyo District Public Prosecutor’s Office for violations of the Financial Instruments and Exchange Act. The suspected company, Ishiyama Gateway Holdings Inc., listed its shares on JASDAQ of Tokyo Stock Exchange, Inc. Suspect A was the representative director, and Suspect B was a managing director along with the representative director of the consolidated subsidiary of the suspected company.

On November 1, 2013, for the purpose of raising the price of shares of the suspected company and selling their holding shares of it in order to make a profit, through the timely disclosure system of the Tokyo Stock Exchange Inc., Suspects A and B in conspiracy announced that the suspected company revised up its consolidated financial forecast of the fiscal year ended June 30, 2014, etc., based on expecting additional sales of about 900,000,000 yen in the second quarter ended December 31, 2013, and about 1,550,000,000 yen in the fiscal year ended June 30, 2014, through its additional sales and installations of biodiesel generators. However, the suspected company and its consolidated company did not actually sell and install the biodiesel generators for client companies in Japan, and in fact the increase of sales and income of the suspected company was not expected. Fraudulent means were thus used in order to trade the shares, and in an attempt to cause fluctuations in the prices of the shares.

Filing criminal charges against a suspect for committing insider trading related to the allocation of new shares to a third party of The Earth CO.

«Summary»

The SESC filed charges against the suspect with the Chiba District Public Prosecutors

Office for violation of the Financial Instruments and Exchange Act.

The suspect received material information from a member of the company that concluded the total underwriting agreement, which determines the conditions for the exercise of the equity warrants with The Earth CO., whose shares are listed on the Mothers Section of Tokyo Stock Exchange, Inc. The suspect was aware of the fact that the organ responsible for making decisions on the execution of the operations of The Earth CO. had decided to offer the allocation of new shares to Don Quijote Holdings Co., Ltd. or its subsidiary.

During the period from January 28, 2013, to March 1, 2013, prior to the announcement of the material information, despite the absence of any legal exception, the suspect purchased a total of 31,110 The Earth CO. shares for a total of 74,181,482 yen under multiple names, including the suspect's own name, through multiple securities companies.

Recommendation to impose an administrative penalty order against an offender who received insider information from an officer of FISCO Ltd. for committing insider trading related to shares of FISCO Ltd. and NCXX Inc.

«Summary»

The SESC recommended the Prime Minister and the commissioner of the FSA to impose an administrative penalty order of 2,250,000 yen against an offender who received insider information from an officer of FISCO Ltd.
The SESC determined, based on an inspection, that the offender had committed insider trading by selling shares of FISCO Ltd. and NCXX Inc. using the insider information.

Recommendation to impose an administrative penalty order against an offender who received insider information from an officer of ENERES Co., Ltd. for committing insider trading related to shares of ENERES Co., Ltd.

«Summary»

The SESC recommended the Prime Minister and the commissioner of the FSA to impose an administrative penalty order of 2,570,000 yen against an offender who received insider information from an officer of ENERES Co., Ltd.
The SESC determined, based on an inspection, that the offender had committed insider trading by purchasing shares of ENERES Co., Ltd. using the insider information.

Recommendation to impose an administrative penalty order against AGORA Hospitality Group Co., Ltd., for making false statements in its disclosure documents

«Summary»

The SESC recommended the Prime Minister and the Commissioner of the FSA to impose an administrative penalty order of 137,910,000 yen against AGORA Hospitality Group Co., Ltd. (“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 overstated “Development projects in progress” in inventories, without an appropriate measurement of fair value of assets of a foreign cemetery business in connection with the acquisition of the business by the Company.