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SESC Latest Topics No.67＜July 2020＞

Last Updated : July 6, 2020

What’s New on the SESC Website

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

Press Releases

(Following press release is available in Japanese)

Financial Instruments Businesses etc.

March 11, 2020:	Recommendation for administrative disciplinary action against DTC Co., Ltd. <Summary> The SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative disciplinary action against DTC Co., Ltd. (hereinafter, “the Company”), an Investment Advisor/Agency. Based on an inspection of the Company, the SESC identified that; (i) the Company had failed to establish a required system including human resources sufficient to properly conduct Investment Advisory/Agency Business; (ii) the Company had made an unfounded advisory aiming at pursuing interests of the de facto rulers; (iii) an officer of the Company had made use of the position of the financial instruments trader to buy and sell securities based on the trend of the orders by the customers and other information obtained in the business; and (iv) the Company had made seriously misleading advertisements to customers.
March 11, 2020:	Recommendation for administrative disciplinary action against TRAFFIC TRADE Co., Ltd. <Summary> The SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative disciplinary action against TRAFFIC TRADE Co., Ltd. (hereinafter, “the Company”), an Investment Advisor/Agency. Based on an inspection of the Company, the SESC identified that; (i) the Company had failed to establish a required system including human resources sufficient to properly conduct Investment Advisory/Agency Business; (ii) the Company had made an unfounded advisory aiming at pursuing interests of the de facto rulers; (iii) an officer of the Company had made use of the position of the financial instruments trader to buy and sell securities based on the trend of the orders by the customers and other information obtained in the business.

March 11, 2020:

Recommendation for administrative disciplinary action against DTC Co., Ltd.

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

Based on an inspection of the Company, the SESC identified that; (i) the Company had failed to establish a required system including human resources sufficient to properly conduct Investment Advisory/Agency Business; (ii) the Company had made an unfounded advisory aiming at pursuing interests of the de facto rulers; (iii) an officer of the Company had made use of the position of the financial instruments trader to buy and sell securities based on the trend of the orders by the customers and other information obtained in the business; and (iv) the Company had made seriously misleading advertisements to customers.

March 11, 2020:

Recommendation for administrative disciplinary action against TRAFFIC TRADE Co., Ltd.

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

Based on an inspection of the Company, the SESC identified that; (i) the Company had failed to establish a required system including human resources sufficient to properly conduct Investment Advisory/Agency Business; (ii) the Company had made an unfounded advisory aiming at pursuing interests of the de facto rulers; (iii) an officer of the Company had made use of the position of the financial instruments trader to buy and sell securities based on the trend of the orders by the customers and other information obtained in the business.

Market Misconduct

April 17, 2020:	Recommendation for administrative monetary penalty payment order for an offender who engaged in sham securities transactions designed to give the false appearance of market trade of shares of SANSHIN CORPORATION. ＜Summary＞ The SESC recommended that the Prime Minister and the Commissioner of the FSA impose an administrative monetary penalty payment order of 334,750,000 yen against an offender who had engaged in sham securities transactions in violation of the Financial Instruments and Exchange Act. Based on an inspection, the SESC identified that the offender had put sale/purchase and resale/repurchase orders of the shares of SANSHIN CORPORATION, resulted in no transfer of the rights. Through these techniques, the offender intended to mislead the market into believing that sales/purchases of the shares of SANSHIN CORPORATION were thriving.
April 17, 2020:	Recommendation for administrative monetary penalty payment order for a contract negotiator of a tender offeror of SANSHIN CORPORATION, for committing insider trading related to shares of the company. ＜Summary＞ The SESC recommended that the Prime Minister and the Commissioner of the FSA impose an administrative monetary penalty payment order of 700,000 yen against a contract negotiator of a tender offeror of SANSHIN CORPORATION. Based on an inspection, the SESC identified that the offender had committed insider trading by purchasing shares of SANSHIN CORPORATION using insider information, in violation of the Financial Instruments and Exchange Act.

April 17, 2020:

Recommendation for administrative monetary penalty payment order for an offender who engaged in sham securities transactions designed to give the false appearance of market trade of shares of SANSHIN CORPORATION.

＜Summary＞

The SESC recommended that the Prime Minister and the Commissioner of the FSA impose an administrative monetary penalty payment order of 334,750,000 yen against an offender who had engaged in sham securities transactions in violation of the Financial Instruments and Exchange Act.

Based on an inspection, the SESC identified that the offender had put sale/purchase and resale/repurchase orders of the shares of SANSHIN CORPORATION, resulted in no transfer of the rights.

Through these techniques, the offender intended to mislead the market into believing that sales/purchases of the shares of SANSHIN CORPORATION were thriving.

April 17, 2020:

Recommendation for administrative monetary penalty payment order for a contract negotiator of a tender offeror of SANSHIN CORPORATION, for committing insider trading related to shares of the company.

＜Summary＞

The SESC recommended that the Prime Minister and the Commissioner of the FSA impose an administrative monetary penalty payment order of 700,000 yen against a contract negotiator of a tender offeror of SANSHIN CORPORATION.

Based on an inspection, the SESC identified that the offender had committed insider trading by purchasing shares of SANSHIN CORPORATION using insider information, in violation of the Financial Instruments and Exchange Act.

False Disclosure Statement

December 10, 2019:	Recommendation for administrative monetary penalty payment order for Nissan Motor Co., Ltd. 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 monetary penalty payment order of 2,424,895,000 yen against Nissan Motor Co., Ltd. (hereinafter, “the Company”). Based on an inspection of the Company’s disclosure statements, the SESC identified that the Company had disclosed false statements in its Annual Security Report, more specifically, had made unreal descriptions in “Part I Information on the Company”“4. Corporate Information”“6. Corporate governance”“(1) Corporate governance”“④ Compensation paid to Directors and Statutory Auditors”“Individual Disclosure for Executives whose Compensation is at or exceeds 100 million yen”. The inspection also found that the Company had made a public offering of its debt securities of 125 billion yen by submitting a Shelf Registration Supplement which also included the above-mentioned false statements.
December 6, 2019:	Recommendation for administrative monetary penalty payment order for Nihon Form Service Co.,Ltd 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 monetary penalty payment order of 24,000,000 yen against Nihon Form Service Co., Ltd. (hereinafter, “the Company”). Based on an inspection of the Company’s disclosure statements, the SESC identified that the Company had disclosed false statements in its Annual Security Report by recognizing premature revenue, understating the costs of sales, and not recording impairments on fixed assets. Moreover, the SESC identified that the Company had disclosed false statements in its Annual Security Report by making unreal descriptions in “Part I Information on the Company”“4. Corporate Information”“6. Corporate governance”“(1) Corporate governance”.
October 23, 2019:	Recommendation for administrative monetary penalty payment order for Meiho Enterprise Co. Ltd 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 monetary penalty payment order of 24,000,000 yen against Meiho Enterprise Co. Ltd. (hereinafter, “the Company”). Based on an inspection of the Company’s disclosure statements, the SESC identified that the Company had disclosed false statements in its Annual Security Report by understating of loan loss provisions.

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