SESC Latest Topics No.14«July 2015»

Last Updated : July 21, 2015

Notification of Inspection Result to Adnet Co., Ltd.

«Summary»

The Director-General of the Kanto Local Finance Bureau announced the results of an inspection of Adnet 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 unregistered operators solicit fund equities and has misappropriated funds.

Petition for court injunction against Dream Japan Co., Ltd., and its manager.

«Summary»

The SESC filed a petition with the Tokyo District Court for injunction against Dream Japan Co., Ltd., (“the Company”) and its manager to prohibit and suspend them from conducting the following activities.

Based on the investigation of the Company, the SESC identified that it engaged in brokering for sales and purchase of listed stocks and trading initial public offerings to customers without statutory registration.

Recommendation to impose an administrative penalty order against an offender who committed market manipulation related to shares of THE SHIGA BANK. LTD and other securities.

«Summary»

The SESC recommended the Prime Minister and the commissioner of the FSA to impose an administrative penalty order of 1,280,000 yen against an offender who committed market manipulation for four days in violation of the Financial Instruments and Exchange Act.

Based on an inspection, the SESC determined that the offender had committed market manipulation by purchasing a large amount of shares of THE SHIGA BANK. LTD. and other securities.

Through these techniques, the offender intended to mislead the market of Proprietary Trading System into believing that sales and purchases of the shares of THE SHIGA BANK. LTD. and other securities were thriving, and to cause fluctuations in market prices in his/her favor.

Recommendation to impose an administrative penalty order against an offender who committed market manipulation related to shares of SAKAE ELECTRONICS CORPORATION, and shares of other companies.

«Summary»

The SESC recommended the Prime Minister and the commissioner of the FSA to impose an administrative penalty order of 46,880,000 yen against an offender who committed market manipulation in violation of the Financial Instruments and Exchange Act.

Based on an inspection, the SESC determined that the offender had committed market manipulation for one day by sale orders of the shares of SAKAE ELECTRONICS CORPORATION at a higher price than the contracted price, and consecutively purchasing shares of SAKAE ELECTRONICS CORPORATION. Through these techniques, the offender intended to mislead the market into believing that sales and purchases of the shares of SAKAE ELECTRONICS CORPORATION were thriving, and to cause fluctuations in market prices in his/her favor.

Based on an inspection, the SESC determined that the offender had committed market manipulation for four days sale orders of the shares of Vector Inc. at a higher price than the contracted price, and consecutively purchasing shares of SAKAE ELECTRONICS CORPORATION than the contracted price. Through these techniques, the offender intended to mislead the market into believing that sales and purchases of the shares of Vector Inc. were thriving, and to cause fluctuations in market prices in his/her favor.

Through these techniques, the offender intended to mislead the market of Proprietary Trading System into believing that sales and purchases of the shares of THE SHIGA BANK. LTD. and other securities were thriving, and to cause fluctuations in market prices in his/her favor.

Filing criminal charges against Ishiyama Gateway Holdings Inc. and its directors for submission of an annual securities report containing false disclosure statements

«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.

Suspects A and B in conspiracy submitted the suspected company’s annual securities report, which contained false disclosure statements, for the fiscal year ended June 2014. Although net sales were actually 3,124,711,000 yen, ordinary loss was 352,505,000 yen, and loss before income taxes and minority interests was 349,563,000 yen, the submitted annual securities report contained false statements in a consolidated profit and loss statement showing net sales of 4,126,166,000 yen, ordinary profit of 38,694,000 yen, and income before income taxes and minority interests of 41,636,000 yen due to abusing methods such as recording fictitious sales.