SESC Latest Topics No.52＜December 2018＞

Petition for a court injunction against Clover Asset Management Co., Ltd., J trust Inc., the CEO of J trust Inc., and the de facto manager of both companies.

<Summary>

The SESC filed a petition with the Tokyo District Court for an injunction against Clover Asset Management Co., Ltd., J trust Inc. (hereinafter collectively “the Companies”), the CEO of J trust Inc., and the Companies’ de facto manager to prohibit and suspend them from conducting the following activities. Based on an investigation of the Companies, the SESC identified that the Companies, the CEO of J trust Inc., and the Companies’ de facto manager have engaged in Type II financial instruments business without statutory registration.

Recommendation to impose an administrative penalty order against an officer of the contract signer with Noevir Holdings Co., Ltd. who recommended the purchase of shares of Noevir Holdings Co., Ltd.

<Summary>

The SESC recommended that the Prime Minister and the Commissioner of the FSA impose an administrative penalty order of 280,000 yen against an officer of the contract signer with Noevir Holdings Co., Ltd.

Based on an inspection, the SESC determined that the offender had committed the offense of recommending the purchase of shares of Noevir Holdings Co., Ltd. to a relative in violation of the Financial Instruments and Exchange Act.

Recommendation to impose an administrative penalty order against an offender who committing insider trading related to shares of Three-F Co., Ltd.

<Summary>

The SESC recommended that the Prime Minister and the Commissioner of the FSA impose an administrative penalty order of 1,130,000 yen against an offender who received insider information from an employee of a contract negotiator of Three-F Co., Ltd.

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

1. Filing criminal charges for committing insider trading of the shares of LC Holdings,Inc. against a suspect.

<Summary>

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

The suspect, who was a representative director of Logicom, Inc. (“Logicom”) listed on the Tokyo Stock Exchange, Inc. (“TSE”), around mid-January 2016, came to know in the course of his/her duty material facts pertaining to Logicom’s business or other matters, that indicated that Logicom had decided to increase its capital through the allocation of new shares to third parties and form a business alliance with K.K. daVinci Holdings. Although there is no exemption clause applicable under the FIEA, between around late January 2016 and around mid-February 2016, prior to the announcement of the material facts, the suspect purchased a total of about 19,000 shares for a total of about 24 million yen on the TSE under the name of another person via a securities firm.　　　　　　

2. Filing of criminal charges for committing insider trading of the shares of LC Holdings, Inc. against two suspects.

<Summary>

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

Suspect A, who was an outside director of Logicom, Inc. (“Logicom”) listed on the Tokyo Stock Exchange, Inc. (“TSE”), around mid-January 2016, came to know in the course of his/her duty material facts pertaining to Logicom’s business or other matters, that indicated that Logicom had decided to increase its capital through the allocation of new shares to third parties and form a business alliance with K.K. daVinci Holdings. Around early February 2016, prior to the announcement of the material facts, Suspect A informed Suspect B of the material facts for the purpose of making Suspect B a profit by purchasing Logicom shares in advance. Although there is no exemption clause applicable under the FIEA, around mid-February 2016, prior to the announcement of the material facts, Suspect B purchased a total of 10,000 Logicom shares for 12 million yen in the TSE under the name of Suspect B via a securities firm.

Suspect B, around early February 2016, as mentioned above, received information from Suspect A that Suspect A came to know in the course of his/her duty the material facts pertaining to Logicom’s business or other matters, around mid-January 2016, that indicated that Logicom had decided to increase its capital through the allocation of new shares to third parties and form a business alliance with K.K. daVinci Holdings. Although there is no exemption clause applicable under the FIEA, around mid-February 2016, prior to the announcement of the material facts, Suspect B purchased a total of 10,000 Logicom shares for 12 million yen in the TSE under the name of Suspect B via a securities firm.