SESC Latest Topics No.83＜August 2022＞

Filing criminal charges for market manipulation against SMBC Nikko Securities Inc.

<Summary>

The SESC filed criminal charges against a suspected company and seven suspects with the Tokyo District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act (hereinafter “FIEA”) (Stabilizing transaction).
 
The suspected company, SMBC Nikko Securities Inc., has engaged in trading of securities, etc.; suspect A was Head of Equity of the suspected company and was in charge of all operations of the department, including proprietary trading for the suspected company; suspect B was Senior Deputy Head of Equity and supported suspect A in his duties; suspect C was Senior Deputy Head of Equity and supported suspect A in his duties; suspect D was General Manager of Equity Trading Division, Equity and was in charge of proprietary trading, etc. for the suspected company; suspect E was General Manager of Equity Products Solutions Division, Equity and was in charge of business activities, such as providing information on the financial instruments offered by the suspected company, as well as proposing and executing transactions; suspect F was Deputy General Manager of Equity Products Solutions Division and Section Manager of Solutions, and supported suspect E in his duties, as well as being in charge of sales support, internal coordination, and so on for deals where clients needed to sell a large amount of shares; suspect G was an employee of Equity Trading Section, Equity Trading Division, Equity and engaged in proprietary trading, etc. for the suspected company.
 
With regard to the business of the suspected company, the suspects effected a series of sales and purchases and made offers to conduct such transactions as described below for the purpose of stabilizing the price of each of the following shares listed on the securities market established by the Tokyo Stock Exchange, Inc. (hereinafter “the market”)  

1. Suspects B, D, E, F, G and others, in conspiracy, made offers to purchase a total of 320,000 shares issued by KOITO MANUFACTURING CO., LTD. (hereinafter “KOITO”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 5,200 yen in the market from around 2:13 p.m. to around 3:00 p.m. on December 25, 2019, and they purchased 314,800 shares in total through the orders, thereby stabilizing the share price of KOITO in violation of the provisions of the Cabinet Order for Enforcement of the FIEA, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 5,070 yen.
2. Suspects D, E and G, in conspiracy, made offers to purchase a total of 158,400 shares issued by MOS FOOD SERVICES, INC. (hereinafter “MOS”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 2,600 yen in the market from around 11:09 a.m. to around 3:00 p.m. on February 27, 2020, and they purchased 65,800 shares in total through the orders, thereby stabilizing the share price of MOS in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 2,600 yen.
3. Suspects D, E, G and others, in conspiracy, made offers to purchase a total of 60,800 shares issued by AS ONE CORPORATION (hereinafter “AS ONE”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 11,000 yen in the market from around 2:43 p.m. to around 3:00 p.m. on August 6, 2020, and they purchased 37,700 shares in total through the orders, thereby stabilizing the share price of AS ONE in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily 　in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 11,000 yen.
4. Suspects A, C, D, E and G, in conspiracy, made offers to purchase a total of 98,500 shares issued by Fibergate Inc. (hereinafter “Fibergate”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 1,960 yen in the market from around 2:47 p.m. to around 3:00 p.m. on August 19, 2020, and they purchased 71,300 shares in total through the orders, thereby stabilizing the share price of Fibergate in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 1,960 yen.
5. Suspects A, D and others, in conspiracy, made offers to purchase a total of 274,000 shares issued by The Keiyo Bank, Ltd. (hereinafter “Keiyo Bank”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 475 yen in the market from around 2:01 p.m. to around 3:00 p.m. on November 19, 2020, and they purchased 168,100 shares in total through the orders, thereby stabilizing the share price of Keiyo Bank in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 475 yen.

Filing criminal charges for market manipulation against SMBC Nikko Securities Inc.(2) 

<Summary>

The SESC filed criminal charges against a suspected company and four suspects with the Tokyo District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act (hereinafter “FIEA”) (Stabilizing transaction).
 
The suspected company, SMBC Nikko Securities Inc., has engaged in trading of securities, etc.; suspect A was Deputy President Executive Officer, Head of Global Markets Unit of the suspected company, and controlled all operations of departments, such as the Equity and the Financial Markets departments, of the suspected company; suspect B was General Manager of Equity Trading Division, Equity and was in charge of proprietary trading, etc. for the suspected company; suspect C was Deputy General Manager of Global Financial Products & Solution Division and Section Manager of Equity Solution, as well as being in charge of sales support, internal coordination, and so on for deals where clients needed to sell a large amount of shares; suspect D was an employee of Equity Trading Section, Equity Trading Division, Equity and was engaged in proprietary trading, etc. for the suspected company.
 
With regard to the business of the suspected company, the suspects effected a series of purchases and made offers to conduct such transactions as described below for the purpose of stabilizing the price of each of the following shares listed on the securities market established by the Tokyo Stock Exchange, Inc. (hereinafter “the market”)

1. Suspects B, C and others, in conspiracy, made offers to purchase a total of 27,700 shares issued by JINS HOLDINGS Inc. (hereinafter “JINS”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 7,790 yen in the market from around 10:39 a.m. to around 11:30 a.m. on October 22, 2020, and they purchased 13,300 shares in total through the orders, thereby stabilizing the share price of JINS in violation of the provisions of the Cabinet Order for Enforcement of the FIEA, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 7,800 yen.
2. Suspect B and others, in conspiracy, made offers to purchase a total of 500,000 shares issued by TOYOTA BOSHOKU CORPORATION (hereinafter “TOYOTA BOSHOKU”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 1,430 yen in the market from around 2:45 p.m. to around 3:00 p.m. on November 17, 2020, and they purchased 500,000 shares in total through the orders, thereby stabilizing the share price of TOYOTA BOSHOKU in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 1,425 yen.
3. Suspect B and others, in conspiracy, made offers to purchase a total of 42,000 shares issued by NIPPON PAINT HOLDINGS CO., LTD. (hereinafter “NIPPON PAINT”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 11,300 yen in the market from around 0:12 p.m. to around 3:00 p.m. on December 15, 2020, and they purchased 40,000 shares in total through the orders, thereby stabilizing the share price of NIPPON PAINT in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 11,220 yen.
4. Suspects B, C, D and others, in conspiracy, made offers to purchase a total of 92,100 shares issued by GOLDWIN INC. (hereinafter “GOLDWIN”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 6,950 yen in the market from around 8:54 a.m. to around 3:00 p.m. on December 22, 2020, and they purchased 71,000 shares in total through the orders, thereby stabilizing the share price of GOLDWIN in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 6,900 yen.
5. Suspects A, B, C and D, in conspiracy, made offers to purchase a total of 100,000 shares issued by TAISHO PHARMACEUTICAL HOLDINGS CO., LTD. (hereinafter “TAISHO”) listed on the market by using methods such as placing a large amount of purchase orders with a limit of 6,600 yen in the market from around 2:57 p.m. to around 3:00 p.m. on April 8, 2021, and they purchased 40,200 shares in total through the orders, thereby stabilizing the share price of TAISHO in violation of the provisions of the Order for Enforcement, in an attempt to avoid a significant decline primarily in the closing price of the day of a “Block Offer” deal handled by the suspected company, which was the basis for the deal price, compared to the closing price of the previous day and to keep the share price at about 6,600 yen.

Filing criminal charges of committing insider trading of the shares of SOFTBRAIN Co., Ltd.

<Summary>

The SESC filed criminal charges against four suspects with the Tokyo District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act (hereinafter “FIEA”) (insider trading and providing of insider information).
 

1. Suspect A

1. Around mid-July 2020, prior to the announcement of the fact concerning the launch of the tender offer, suspect A informed his/her acquaintance B of the fact concerning the launch of the tender offer in Tokyo, for the purpose of enabling acquaintance B to make a profit by purchasing the shares of SOFTBRAIN in advance. Based on this, acquaintance B purchased a total of 20,000 shares for a total of approximately 6.7 million yen on the TSE via a securities firm around late July 2020, prior to the announcement of the fact concerning the launch of the tender offer, despite there being no applicable exemption clause under the FIEA.
2. Suspect A, in conspiracy with his/her acquaintance C, purchased a total of approximately 10,000 shares for a total of approximately 3.9 million yen on the TSE, etc. under acquaintance C’s name via a securities firm between around late July 2020 and around mid-August 2020, prior to the announcement of the fact concerning the launch of the tender offer, despite there being no applicable exemption clause under the FIEA.
3. Around late July 2020, prior to the announcement of the fact concerning the launch of the tender offer, suspect A informed his/her acquaintance D of the fact concerning the launch of the tender offer in Tokyo, for the purpose of enabling acquaintance D to make a profit by purchasing the shares of SOFTBRAIN in advance. Based on this, acquaintance D placed buy orders for a total of 27,000 shares on the TSE, of which approximately 10 million yen worth was for him/herself, under his/her own name via a securities firm around early August 2020, and acquaintance D purchased 24,545 shares out of a total of 27,000 shares executed for a price of approximately 9.8 million yen around early August 2020, prior to the announcement of the fact concerning the launch of the tender offer, despite there being no applicable exemption clause under the FIEA.
4. Suspect A, in conspiracy with acquaintance D, placed buy orders for a total of 27,000 shares on the TSE, of which approximately one million yen worth was for suspect A, under acquaintance D’s name via a securities firm around early August 2020, and on the same day purchased 2,455 of the shares that were executed for a total price of approximately 900,000 yen, prior to the announcement of the fact concerning the launch of the tender offer, despite there being no applicable exemption clause under the FIEA.

2. Suspect B

3. Suspect C

4. Suspect D

Suspect D was informed by suspect A, who was a manager of the internal audit office of SOFTBRAIN, of the fact concerning the launch of the tender offer, which directors of SOFTBRAIN came to know in the course of their duties from Ant, to the effect that the executive decision-making body of Ant had made the decision to conduct the tender offer for the shares of SOFTBRAIN around late July 2020, after suspect A came to know the fact in the course of his/her duty, and placed buy orders for a total of 27,000 shares on the TSE, of which approximately one million yen worth was placed in conspiracy with suspect A, and approximately 10 million yen worth was placed solely by suspect D, under suspect D’s name via a securities firm around early August 2020. Out of a total of 27,000 shares that were executed, suspect D, in conspiracy with suspect A, purchased 2,455 shares for a price of approximately 900,000 yen, and suspect D alone purchased 24,545 shares for a price of approximately 9.8 million yen around early August 2020, prior to the announcement of the fact concerning the launch of the tender offer, despite there being no applicable exemption clause under the FIEA.