SESC Latest Topics No.98＜April 2024＞

Recommendation for an administrative monetary penalty payment order against SAKAI Holdings CO., LTD for making false statements in its disclosure documents.

<Summary>

The Securities and Exchange Surveillance Commission (SESC) made a recommendation that the Prime Minister and the Commissioner of the Financial Services Agency impose an administrative monetary penalty order of 30,000,000 yen against SAKAI Holdings CO., LTD (hereinafter, “the Company”). As a result of an inspection from a disclosure-regulation perspective, the SESC accordingly recognized that the Company made false statements in the Annual Securities Reports, Quarterly Reports, amended reports of Annual Securities Reports, and amended reports of Quarterly Reports that it submitted due to improper accounting treatment by the Company's consolidated subsidiary.

Recommendation for an administrative monetary penalty payment order against market manipulation in the shares of OHMORI Co., Ltd. (“Company”)

<Summary>
The SESC recommended that the Prime Minister and the Commissioner of the FSA issue an administrative monetary penalty payment order of 2,280,000 yen against an individual investor who committed market manipulation in violation of the Financial Instruments and Exchange Act.
 
As a result of its investigation, the SESC found that the individual investor committed market manipulation for the purpose of stabilizing the price of the Company’s shares, by (1) placing a lot of passive buy orders at the best bid or a lower price to create the appearance that many buy orders existed on the order book, (2) submitting one’s own aggressive buy orders at the latest execution price or higher to match one’s own passive sell orders on the opposite side of the order book, and (3) submitting aggressive buy orders at a price higher than the latest execution price and executing them to pull the falling price back.
 
With the scheme described above, the individual investor effected a series of purchase and sales of securities and entrusted them for the purpose of stabilizing the share price.

Recommendation for administrative monetary penalty payment orders against an employee (“Employee”) of TATSUTA ELECTRIC WIRE AND CABLE CO., Ltd. (“Company”) who engaged in insider trading and tipped a person, and against the tippee (“Tippee”), who also engaged in insider trading.

<Summary>

The SESC recommended that the Prime Minister and the Commissioner of the FSA issue administrative monetary penalty payment orders against the Employee and the Tippee.
 
As a result of its investigation, the SESC found that (1) the Employee purchased the Company’s shares on the basis of material non-public information about a tender offer and tipped the information, and that (2) the Tippee also purchased the shares based on the information, in violation of the Financial Instruments and Exchange Act.
 
The SESC filed the penalties as follows:
(1) 1,260,000 yen against the Employee; and
(2) 1,330,000 yen against the Tippee.