SESC Latest Topics No.53＜January 2019＞

Last Updated : January 31, 2019

What’s New on the SESC Website

This page contains the latest in events, developments, and updates to the SESC website.

December 7, 2018:	Recommendation for an administrative disciplinary action against Ai Trust Co., Ltd. <Summary> The SESC recommended that the Prime Minister and the Commissioner of the FSA take an administrative disciplinary action against Ai Trust Co., Ltd. (hereinafter “the Company”), a Type II Financial Instruments Business Operator. Based on an inspection of the Company, the SESC identified that the Company had made false representations for the solicitation of funds.

December
7, 2018:

Recommendation for an administrative disciplinary action against Ai Trust Co., Ltd.

The SESC recommended that the Prime Minister and the Commissioner of the FSA take an administrative disciplinary action against Ai Trust Co., Ltd. (hereinafter “the Company”), a Type II Financial Instruments Business Operator.
Based on an inspection of the Company, the SESC identified that the Company had made false representations for the solicitation of funds.

Policy Proposal

December 7, 2018:	Policy proposal regarding providing information to investors in loan-type funds <Summary> The inspections of dealers who sell the equity interests of collective investment schemes investing in loan assets (hereinafter “loan-type funds”) resulted in findings of many malicious cases in which investors suffered damages or dealers of loan-type funds violated the Financial Instruments and Exchange Acts. As the background to the current situation, information regarding loanees (borrowers of funds) are not being provided adequately to investors in loan-type funds. Therefore, the SESC, pursuant to Article 21 of the Financial Services Agency Establishment Act, submitted a policy proposal to the Prime Minister and the Commissioner of the FSA that the provision of information and explanations to investors in loan-type funds should be expanded in order to assist investors to make appropriate investment decisions.

December
7, 2018:

Policy proposal regarding providing information to investors in loan-type funds

The inspections of dealers who sell the equity interests of collective investment schemes investing in loan assets (hereinafter “loan-type funds”) resulted in findings of many malicious cases in which investors suffered damages or dealers of loan-type funds violated the Financial Instruments and Exchange Acts. As the background to the current situation, information regarding loanees (borrowers of funds) are not being provided adequately to investors in loan-type funds. Therefore, the SESC, pursuant to Article 21 of the Financial Services Agency Establishment Act, submitted a policy proposal to the Prime Minister and the Commissioner of the FSA that the provision of information and explanations to investors in loan-type funds should be expanded in order to assist investors to make appropriate investment decisions.

Market Misconduct

December 18, 2018:	Filing of criminal charges for committing insider trading of the shares of DALTON CORPORATION. The SESC filed a charge against two suspects with the Osaka District Public Prosecutors Office for alleged violation of the Financial Instruments and Exchange Act (FIEA). The conduct underlying the charges is as described below. Suspect A was an employee of SMBC Nikko Securities Inc.（“SMBC Nikko”）. Employees of SMBC Nikko came to know that a decision-making organ of ITOKI CORPORATION (“ITOKI”) had decided to conduct a tender offer for the purchase of DALTON CORPORATION (“DALTON”) shares which were listed on the securities market established by the Tokyo Stock Exchange (“TSE”) in the course of the conclusion of a financial advisory agreement with ITOKI. Around late July 2016, Suspect A in the course of its duties came to know of such a fact concerning the launch of a tender offer, etc. and then; I Suspect B was informed of the fact concerning the launch of a tender offer, etc. by Suspect A, and purchased a total of 296,000 shares for a total of approximately 53 million yen on the TSE under its own name via a securities firm between around late July 2016 and around early August 2016 (prior to the announcement of the fact) despite there being no applicable exemption clause under the FIEA. II Suspect A informed Suspect B of the fact concerning the launch of a tender offer, etc. with the intent of making Suspect B benefit from the purchase of DALTON shares in advance, around late July 2016 (prior to the announcement of the fact). Based on this, Suspect B purchased a total of 296,000 shares for a total of approximately 53 million yen as described in I, despite there being no applicable exemption clause under the FIEA.

December
18, 2018:

Filing of criminal charges for committing insider trading of the shares of DALTON CORPORATION.

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

Suspect A was an employee of SMBC Nikko Securities Inc.（“SMBC Nikko”）. Employees of SMBC Nikko came to know that a decision-making organ of ITOKI CORPORATION (“ITOKI”) had decided to conduct a tender offer for the purchase of DALTON CORPORATION (“DALTON”) shares which were listed on the securities market established by the Tokyo Stock Exchange (“TSE”) in the course of the conclusion of a financial advisory agreement with ITOKI. Around late July 2016, Suspect A in the course of its duties came to know of such a fact concerning the launch of a tender offer, etc. and then;

I Suspect B was informed of the fact concerning the launch of a tender offer, etc. by Suspect A, and purchased a total of 296,000 shares for a total of approximately 53 million yen on the TSE under its own name via a securities firm between around late July 2016 and around early August 2016 (prior to the announcement of the fact) despite there being no applicable exemption clause under the FIEA.

II Suspect A informed Suspect B of the fact concerning the launch of a tender offer, etc. with the intent of making Suspect B benefit from the purchase of DALTON shares in advance, around late July 2016 (prior to the announcement of the fact). Based on this, Suspect B purchased a total of 296,000 shares for a total of approximately 53 million yen as described in I, despite there being no applicable exemption clause under the FIEA.

December 10, 2018:	Filing of criminal charges for submission of an annual securities report containing false disclosure statements against Nissan Motor Co., Ltd. and suspects. <Summary> The SESC filed criminal charges against one suspected company and two suspects with the Tokyo District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act (FIEA). The conduct underlying the charges is as described below. The suspected company, Nissan Motor Co., Ltd., lists its shares on the first section of Tokyo Stock Exchange, has its head office in Yokohama city and is engaged in manufacturing, sales and other business related to automobiles. Suspect A used to be a chairman and representative director at the suspected company. Suspect B used to be a representative director at the suspected company. I. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2011, was approximately 1.777 billion yen, at the end of June of 2011, both of the suspects, conspiring with each other, in the course of business of Nissan Motor Co., Ltd., concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 0.982 billion yen in the table “The total amount of consolidated remuneration for each officer ” in the section “Corporate governance”; II. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2012, was approximately 1.894 billion yen, at the end of June of 2012, both of the suspects, conspiring with each other, in the course of business of the suspected company, Nissan Motor Co., Ltd. (the “suspected company”), concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 0.987 billion yen in the table “The total amount of consolidated remuneration for each officer ” in the section “Corporate governance”; III. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2013, was approximately 2.025 billion yen, at the end of June 2013, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 0.988 billion yen in the table “The total amount of consolidated remuneration for each officer” in the section “Corporate governance”; IV. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2014, was approximately 1.946 billion yen, at the end of June of 2014, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 0.995 billion yen in the table “The total amount of consolidated remuneration for each officer ” in the section “Corporate governance”; V. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2015, was approximately 2.213 billion yen, at the end of June of 2015, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 1.035 billion yen in the table “The total amount of consolidated remuneration for each officer” in the section “Corporate governance”. （The suspected company is subject to fact II to fact V. Both of the suspects are subject to fact I to fact V）
January 10, 2019:	(2) Filing of criminal charges for submission of an annual securities report containing false disclosure statements against Nissan Motor Co., Ltd. and suspects. <Summary> The SESC filed criminal charges against one suspected company and two suspects with the Tokyo District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act (FIEA). The conduct underlying the charges is as described below. The suspected company, Nissan Motor Co., Ltd. (the“suspected company”), lists its shares on the first section of Tokyo Stock Exchange, has its head office in Yokohama city and is engaged in manufacturing, sales and other business related to automobiles. Suspect A used to be a chairman and representative director at the suspected company. Suspect B used to be a representative director at the suspected company. I. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from the suspected company and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2016, was approximately 2.282 billion yen, in late June 2016, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 1.071 billion yen in the table “The total amount of consolidated remuneration for each officer” in the section “Corporate governance”; II. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from the suspected company and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2017, was approximately 2.402 billion yen, in late June 2017, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 1.098 billion yen in the table “The total amount of consolidated remuneration for each officer”; III. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from the suspected company and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2018, was approximately 2.491 billion yen, in late June 2018, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 0.735 billion yen in the table “The total amount of consolidated remuneration for each officer”.

December
10, 2018:

Filing of criminal charges for submission of an annual securities report containing false disclosure statements against Nissan Motor Co., Ltd. and suspects.

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

The suspected company, Nissan Motor Co., Ltd., lists its shares on the first section of Tokyo Stock Exchange, has its head office in Yokohama city and is engaged in manufacturing, sales and other business related to automobiles. Suspect A used to be a chairman and representative director at the suspected company. Suspect B used to be a representative director at the suspected company.

I. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2011, was approximately 1.777 billion yen, at the end of June of 2011, both of the suspects, conspiring with each other, in the course of business of Nissan Motor Co., Ltd., concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 0.982 billion yen in the table “The total amount of consolidated remuneration for each officer ” in the section “Corporate governance”;

II. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2012, was approximately 1.894 billion yen, at the end of June of 2012, both of the suspects, conspiring with each other, in the course of business of the suspected company, Nissan Motor Co., Ltd. (the “suspected company”), concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 0.987 billion yen in the table “The total amount of consolidated remuneration for each officer ” in the section “Corporate governance”;

III. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2013, was approximately 2.025 billion yen, at the end of June 2013, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 0.988 billion yen in the table “The total amount of consolidated remuneration for each officer” in the section “Corporate governance”;

IV. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2014, was approximately 1.946 billion yen, at the end of June of 2014, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 0.995 billion yen in the table “The total amount of consolidated remuneration for each officer ” in the section “Corporate governance”;

V. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from Nissan Motor Co., Ltd. and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2015, was approximately 2.213 billion yen, at the end of June of 2015, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 1.035 billion yen in the table “The total amount of consolidated remuneration for each officer” in the section “Corporate governance”.

（The suspected company is subject to fact II to fact V. Both of the suspects are subject to fact I to fact V）

January
10, 2019:

(2) Filing of criminal charges for submission of an annual securities report containing false disclosure statements against Nissan Motor Co., Ltd. and suspects.

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

The suspected company, Nissan Motor Co., Ltd. (the“suspected company”), lists its shares on the first section of Tokyo Stock Exchange, has its head office in Yokohama city and is engaged in manufacturing, sales and other business related to automobiles. Suspect A used to be a chairman and representative director at the suspected company. Suspect B used to be a representative director at the suspected company.

I. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from the suspected company and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2016, was approximately 2.282 billion yen, in late June 2016, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 1.071 billion yen in the table “The total amount of consolidated remuneration for each officer” in the section “Corporate governance”;

II. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from the suspected company and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2017, was approximately 2.402 billion yen, in late June 2017, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of the total remuneration and that of the basic remuneration for Suspect A were 1.098 billion yen in the table “The total amount of consolidated remuneration for each officer”;

III. Even though the remunerations, bonuses and other property benefits which Suspect A was entitled to receive as a director from the suspected company and its main consolidated subsidiaries for its execution of duties (collectively the “remuneration”), corresponding to the consolidated fiscal year ending March 2018, was approximately 2.491 billion yen, in late June 2018, both of the suspects, conspiring with each other, in the course of business of the suspected company, concealed part of the remuneration and submitted an annual securities report in the consolidated fiscal year which stated that both the amount of total remuneration and that of the basic remuneration for Suspect A were 0.735 billion yen in the table “The total amount of consolidated remuneration for each officer”.

SESC Latest Topics No.53＜January 2019＞

Press Releases

(Following press release is available in Japanese)

Financial Instruments Businesses etc.

Policy Proposal

Market Misconduct

False Disclosure Statement

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