SESC Latest Topics No.28«September 2016»

Last Updated : September 14, 2016

Recommendation for an administrative action against Grand Win Partners Inc.

«Summary»

The SESC recommended that the prime minister and the commissioner of the FSA take an administrative action against Grand Win Partners Inc. (hereinafter “the Company”), a Type II Financial Instruments Business Operator.

Based on an inspection of the Company, the SESC identified that the Company had (i) handled private placements of investments based on silent partnership contracts, while recognizing misappropriation of the capital received from investors, (ii) made false statements to customers in relation to the conclusion of financial instruments transaction contracts and their solicitation, (iii) responded with false reporting to an order from the FSA for the production of reports and (iv) failed to be adequately staffed to properly conduct financial instruments business.

Recommendation to impose an administrative penalty order against an offender who received insider information from an employee of a subsidiary of Toyo Tire & Rubber Co., Ltd. for committing insider trading related to the shares of Toyo Tire & Rubber Co., Ltd.

«Summary»

The SESC recommended that the Prime Minister and the commissioner of the FSA impose an administrative penalty order of 1,670,000 yen against an offender who received insider information pertaining to business from a person who had come to know the insider information from an employee of a subsidiary of Toyo Tire & Rubber Co., Ltd, the business of which the employee had been engaged in.

Based on an inspection, the SESC determined that the offender had committed insider trading by selling shares of Toyo Tire & Rubber Co., Ltd. using the insider information, in violation of the Financial Instruments and Exchange Act.

Filing a criminal charge against a person suspected of committing market manipulation.

«Summary»

The SESC filed a charge against the suspect with the Saitama District Public Prosecutors Office in violation of the Securities and Exchange Act.

The suspect, in conspiracy with A and B, committed market manipulation as described below, with regard to the shares of OHT Inc. (“OHT”), listed on MOTHERS of Tokyo Stock Exchange, Inc., for the purpose of aiming to raise the price of the share.

For the purpose of inducing sales and purchases of the shares on seven trading days between October 17, 2005, and October 25, 2005, they conducted a series of sales, purchases, and entrustments of the shares that would mislead others into believing that sales and purchases of the shares were thriving and would cause fluctuations in the price of the shares. They raised the share price of OHT from 270,000 yen to 314,000 yen, by the following actions: purchasing 2,453 shares taking advantage of methods such as placing a series of market purchase orders or placing a series of limit purchase orders at prices higher than the previous quotations and executing the orders at increasing prices, placing limit purchase orders at prices higher than the previous quotations just before the closing of session and raising the closing price artificially, and selling 824 shares simultaneously, under the name of B and four other persons via eight securities firms, by conducting entrustments of purchases of 4,118 shares taking advantage of methods such as placing a large amount of limit purchase orders at prices lower than the previous quotations, under the name of B and two other persons via five securities firms.

In addition, among the series of purchases and sales of OHT shares for the same period as described above, they conducted fake sales and purchases for a total of 723 shares on four trading days without the purpose of transfer of right by selling and purchasing the shares at the same time, under the name of B and two others persons via seven securities firms, for the purpose of misleading others about the state of sales and purchases of the shares such as misleading others into believing that sales and purchases of the shares were thriving.