SESC Latest Topics No.51＜November 2018＞

Recommendation for an administrative disciplinary action against Delta Investment Co., Ltd.

<Summary>

The SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative disciplinary action against Delta Investment Co., Ltd. (hereinafter “the Company”), an Investment Advisor/Agency.

This recommendation is based on the findings of an inspection of the Company, under which the Director-General of the Fukuoka Local Finance Branch Bureau identified that the Company (i) had been lending its name to an unregistered business operator and (ii) had failed to establish a system required, and to secure a personnel structure sufficient to properly conduct Investment Advisory/Agency Business.

Recommendation for an administrative disciplinary action against Toyo Securities Co., Ltd.

<Summary>

The SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative disciplinary action against Toyo Securities Co., Ltd. (hereinafter “the Company”), a Type I and II Financial Instruments Business Operator.

This recommendation is based on the findings of an inspection of the Company, under which the Director-General of the Kanto Local Finance Bureau identified that the Company had made false representations or misleading representations regarding important matters for the solicitation of U.S. stock trading.

Filing criminal charges for committing insider trading of the shares of ASATSU-DK Inc. against a suspect.

<Summary>

The SESC filed charges against a person suspected with the Tokyo District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act (the “FIEA”). The conduct underlying the charge is as described below.

The Suspect, who was an executive officer of ASATSU-DK Inc. (“ASATSU”), which listed its shares on the first section of the Tokyo Stock Exchange, Inc. (“TSE”), involved in the operations of ASATSU. Around late September 2017, the suspect came to know in the course of his/her duty the fact concerning the launch of a tender offer that the Representative Director and others of ASATSU came to know in the course of their duty from BCPE Madison Cayman, L.P., which had decided to conduct a tender offer for the shares of ASATSU.

Around late September 2017, prior to the announcement of the fact concerning the launch of a tender offer, although there is no exemption clause applicable under the FIEA, the suspect purchased a total of 26,000 ASATSU shares for a total of about 82 million yen on the TSE under the name of another person via a securities firm.
Around late September 2017, prior to the announcement of the fact concerning the launch of a tender offer, the suspect recommended to his/her acquaintance to purchase ASATSU shares for the purpose of making the acquaintance a profit by purchasing in advance, and informed the acquaintance of the fact. Thus, around late September 2017, prior to the announcement of the fact, although there is no exemption clause applicable under the FIEA, the acquaintance purchased a total of 300 ASATSU shares for a total of about 0.9 million yen on the TSE via a securities firm.