SESC Latest Topics No.27«August 2016»

Last Updated : August 19, 2016

Notification of Inspection Results to G.S.T Inc.

«Summary»

The Director-General of the Fukuoka Local Finance Branch Bureau announced the results of an inspection of G.S.T Inc. (hereinafter “the Company”), a Specially Permitted Business Notifying Person.

Based on the inspection of the Company, the Director-General of the Fukuoka Local Finance Branch Bureau identified that the Company has (i) engaged in Type II financial instruments business and investment management business without statutory registration and (ii) had problems concerning investor protection in specially permitted business.

Filing a criminal charge against a person suspected of committing insider trading in violation of the Financial Instruments and Exchange Act.

«Summary»

The SESC filed a charge against the suspect with the Tokyo District Public Prosecutor’s Office for committing insider trading in relation to a revision of the ordinary profit forecast for ALBERT Inc. (“ALBERT”).

1. The suspect, who was chair of the board at ALBERT, listed on MOTHERS of Tokyo Stock Exchange, Inc., was involved in the management of the company. The suspect had come to know a material fact which may have had a significant influence on investors’ investment decisions in the course of the suspect’s duty around September 16, 2015. The material fact was a figure of the ordinary profit forecast for the fiscal year from January 1, 2015 to December 31, 2015, indicating a move from the black into the red, judging from a disparity between the figure of the ordinary profit forecast announced on February 19, 2015, and the newly calculated figure.

   Although there is no exemption clause applicable under the Financial Instruments and Exchange Act (“FIEA”), the suspect sold a total of 19,100 ALBERT shares for a total of 38,256,400 yen under the name of Relative A via a securities firm between October 15, 2015, and October 29, 2015, prior to the announcement of the material fact.

2. In addition, the suspect conveyed the material fact to Relative B and Acquaintance C for the purpose of avoiding their losses by selling ALBERT shares prior to the announcement of the material fact around October 7, 2015.

   Although there is no exemption clause applicable under the FIEA, Relative B and Acquaintance C, who knew the material fact, sold ALBERT shares prior to the announcement of the material fact.

Recommendation to impose an administrative penalty order against MAG NET HOLDINGS, INC. for making false statements in its disclosure documents

«Summary»

The SESC recommended that the prime minister and the commissioner of the FSA impose an administrative penalty order of 12,000,000 yen against MAG NET HOLDINGS, INC. ("the company"). Based on an inspection of the company’s disclosure statements, the SESC determined that the company has made false statements in its ongoing disclosure documents, and that it failed to properly record an allowance for doubtful accounts and dispose of loss of accrued receivables, with regard to short-term loan receivables etc.