SESC Latest Topics No.29«October 2016»

Last Updated : October 28, 2016

Recommendation for an administrative action against Winvol Co., Ltd, and three other associated companies.

«Summary»

The SESC recommended that the prime minister and the commissioner of the FSA take an administrative action against Winvol Co., Ltd., Winvol Station LLC., Winvol Dream LLC., and Winvol Falcon LLC. (hereinafter “the Companies”), each being a Specially Permitted Business Notifying Person.

This recommendation is based on the findings of an inspection of the Companies, whereby the director-general of the Kanto Local Finance Bureau identified that the Companies had (i) engaged in investment management business without statutory registration and (ii) had problems concerning investor protection in their business operations.

Inspection results and recommendation for an administrative action against Tokyo Asia Leprechaun Co., Ltd.

«Summary»

Based on an inspection of Tokyo Asia Leprechaun Co., Ltd. (hereinafter “the Company”), a Specially Permitted Business Notifying Person, the director-general of the Kanto Local Finance Bureau identified that the Company had (i) engaged in type II financial instruments business without statutory registration, (ii) engaged in investment management business without statutory registration and (iii) had problems concerning investor protection in specially permitted business.

The SESC recommended that the prime minister and the commissioner of the FSA take an administrative action against the Company with respect to the findings described in (ii) and (iii) above.

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 committed market manipulation as described below, with regard to the shares of OHT Inc. (“OHT”), listed on MOTHERS of Tokyo Stock Exchange, Inc. (“TSE”), 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 November 21, 2006, and November 30, 2006, in the Mothers of TSE, the suspect 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. The suspect raised the share price of OHT from 1,030,000 yen to 1,140,000 yen, by the following actions: purchasing 392 shares taking advantage of methods such as placing a series of limit purchase orders at prices higher than the previous quotations and executing the orders at increasing prices, and selling 438 shares simultaneously, under the name of 10 persons via 15 securities firms, by conducting entrustments of purchases of 50 shares taking advantage of methods such as placing limit purchase orders at prices lower than the previous quotations in the multiple price ranges to increase the volume of limit purchase orders, under the name of six persons via six securities firms.

In addition, on seven trading days for the same period as described above, the suspect conducted fake sales and purchases for a total of 258 shares, without the purpose of transfer of right by selling and purchasing the shares at the same time, under the name of 10 persons via 14 securities firms in the Mothers of TSE, 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.

The SESC appreciates assistance of the Japan Exchange Regulation in this matter.

Recommendation to impose an administrative penalty order against an offender who received insider information from a contract negotiator of a tender offeror of Minnano Wedding Co., Ltd. for committing insider trading related to shares of Minnano Wedding Co., Ltd.

«Summary»

The SESC recommended that the Prime Minister and the commissioner of the FSA impose an administrative penalty order of 10,570,000 yen against an offender who received insider information from a contract negotiator of a tender offeror of Minnano Wedding Co., Ltd.

Based on an inspection, the SESC determined that the offender had committed insider trading by purchasing shares of Minnano Wedding Co., Ltd. using the insider information, in violation of the Financial Instruments and Exchange Act.

Recommendation to impose an administrative penalty order against an offender who committed market manipulation related to shares of TECHNO HORIZON HOLDINGS CO., LTD. and two other securities.

«Summary»

The SESC recommended that the Prime Minister and the commissioner of the FSA impose an administrative penalty order of 4,140,000 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 through Sale Entrustments by placing a large amount of sale orders of shares of TECHNO HORIZON HOLDINGS CO., LTD. and two other securities at higher prices than the contracted prices, and by Purchase Entrustments by placing a large amount of purchase orders of shares of TECHNO HORIZON HOLDINGS CO., LTD. and two other securities at lower prices than the contracted price, for the purpose of inducing sales and purchase of Securities.

Through these techniques, the offender intended to mislead other persons into believing that the sales and purchase of the securities were thriving and cause fluctuations in market prices in his/her favor.

Recommendation to impose an administrative penalty order against a contract negotiator of a tender offeror of KEIOZU HOLDINGS COMPANY for committing insider trading related to shares of KEIOZU HOLDINGS COMPANY.

«Summary»

The SESC recommended that the acting Prime Minister and the commissioner of the FSA impose an administrative penalty order of 600,000 yen against a contract negotiator of a tender offeror of KEIOZU HOLDINGS COMPANY.

Based on an inspection, the SESC determined that the offender had committed insider trading by purchasing shares of KEIOZU HOLDINGS COMPANY using the insider information, in violation of the Financial Instruments and Exchange Act.

Recommendation to impose an administrative penalty order against MediBIC Group 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 113,330,000 yen against MediBIC Group ("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 offering disclosure documents, which overstated sales amounts, by making it appear that a transfer contract of the right to development has been concluded and that accounts receivable are collected.