SESC Latest Topics No.91＜June 2023＞

Recommendation for administrative disciplinary action against Union Securities Advisors Co., Ltd.

<Summary>

The SESC recommended that the Prime Minister and the Commissioner of the FSA take an administrative disciplinary action against Union Securities Advisors Co., Ltd. (hereinafter "the Company"), a Financial Instruments Intermediary Service Provider.
This recommendation is based on findings in inspection of the Company, under which the Director-General of the Kanto Local Finance Bureau identified that the Company had solicited shares in collective investment schemes without statutory registration, etc.

Recommendation for administrative disciplinary action against Ronnaru Forex Co., Ltd.

<Summary>

The SESC recommended that the Prime Minister and the Commissioner of the FSA take an administrative disciplinary action against Ronnaru Forex Co., Ltd. (hereinafter "the Company"), a Type I Financial Instruments Business Operator.
This recommendation is based on findings in inspection of the Company, under which the Director-General of the Shikoku Local Finance Bureau identified that the Company had (i) submitted a business report containing a false statement, etc., (ii) allowed its Net Assets and Capital Adequacy Ratio to fall below the required statutory standards, etc., and (iii) failed to establish the necessary system and a sufficient personnel structure to perform type I financial instruments business in an appropriate manner.
 

Filing a criminal charge of committing transaction recommendation of the shares of IR Japan Holdings, Ltd.

<Summary>

The SESC filed a criminal charge against a suspect with the Tokyo District Public Prosecutors Office for violation of the Financial Instruments and Exchange Act (hereinafter “FIEA”) (transaction recommendation).
 
The suspect, who was an executive vice president and chief operating officer of IR Japan Holdings, Ltd. (hereinafter, “IR Japan Holdings”), which listed its shares on the securities market established by the Tokyo Stock Exchange, Inc. (hereinafter “TSE”),  around late March 2021, came to know in the course of his/her duty a material fact concerning the business, etc. of IR Japan Holdings that the newly calculated forecast figure with regard to the consolidated sales to which IR Japan Holdings belonged for the business year from April 1, 2020, to March 31, 2021, decreased compared to the forecast figure that IR Japan Holdings had announced, and that such a difference as would have a material impact on investors' investment decisions, which is regarded under the criteria specified by a Cabinet Office Ordinance, arose.

1. Between around early April 2021 and around mid-April 2021, prior to the announcement of the material fact, the suspect, for the purpose of enabling A to avoid a loss by selling the shares of IR Japan Holdings in advance, recommended A several times to sell the shares of IR Japan Holdings, because of which, A sold a total of approximately 9,000 shares of IR Japan Holdings for a total of approximately 148 million yen on the TSE via securities firms around mid-April 2021, prior to the announcement of the material fact, despite there being no applicable exemption clause under the FIEA.
2. Around mid-April 2021, prior to the announcement of the material fact, the suspect, for the purpose of enabling B to avoid a loss by selling the shares of IR Japan Holdings in advance, recommended B several times to sell the shares of IR Japan Holdings, because of which, B sold a total of 2,000 shares of IR Japan Holdings for a total of approximately 32 million yen on the TSE via a securities firm around mid-April 2021, prior to the announcement of the material fact, despite there being no applicable exemption clause under the FIEA.