SESC Latest Topics No.108＜December 2025＞

Recommendation based on Inspection Results for Sumisho Realty Management Co., Ltd.

<Summary>

　As a result of the SESC’s inspection of Sumisho Realty Management Co., Ltd. (hereinafter "the Company"), which is an investment management company, the SESC found that the Company did not faithfully engage in investment management business on behalf of the relevant investment corporation. Therefore, on November 11, 2025, the SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative actions.

　Specifically, based on the premise that properties would be acquired at the price offered by the parent company, the Company searched for and selected a real estate appraiser who could be expected to take actions in line with the purpose of the real-estate appraisal in order to satisfy the level of the required real-estate appraisal value, made an inappropriate approach to the real-estate appraiser, and then had the investment corporation acquire properties based on the real-estate appraisal value calculated using the above approach. This is against the purpose of the internal rules (which set the appraisal value as the upper limit of the property acquisition price) to eliminate the harmful effects of transactions involving conflicts of interest through real-estate appraisals by parties other than interested parties and to protect the interests of investors, and the Company failed to faithfully conduct investment management business for the investment corporation, and thus the Company is deemed to have a serious problem in terms of investor protection.
 

Recommendation based on Inspection Results for Daiichi Premiere Securities Co., Ltd.

<Summary>

　As a result of the Kanto Local Finance Bureau's inspection of Daiichi Premiere Securities Co., Ltd. (Type I Financial Instruments Business Operator; hereinafter the "Company"), it was found that the management of the Company's business operations was significantly inappropriate and that the Company had not secured officers with sufficient knowledge and experience necessary for the execution of financial instruments business.

　Therefore, on November 18, 2025, the SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative actions.

　Specifically, despite the fact that the Company had been subject to administrative sanctions in the past and formulated improvement measures to strengthen its business management system, etc., it failed to implement those measures. Instead, at the request of a person who met the criteria for refusal of registration according to the will of certain shareholders, the management of the Company took the lead in repeatedly making false reports in violation of business improvement orders and orders for the collection of reports.

　The Company's management team did not establish an appropriate business management system as a corporate manager and significantly lacked awareness of legal compliance. Therefore, the Company's management team did not have sufficient knowledge and experience necessary for the execution of financial instruments business.

Recommendation for administrative monetary penalty payment orders against an officer (“Officer”) of a firm that entered into an agreement with IWATSU ELECTRIC CO., LTD. (“Company”) for providing information to a person (“Tippee”), and against another firm (“Firm B”) to which the Tippee belongs for insider trading.

<Summary>

　The SESC recommended that the Prime Minister and the Commissioner of the FSA issue administrative monetary penalty payment orders against the Officer and Firm B, which was tipped by the Officer in violation of the Financial Instruments and Exchange Act.
 
　As a result of its investigation, the SESC found as follows:
(i) the Officer, who learned of material nonpublic information about a share exchange of all the Company’s shares with Ai Holdings Corporation during the performance of the contract, provided the information to Firm B so that Firm B could make profits; and
(ii) the Tippee was provived by the Officer and then purchased the Company’s shares related to Firm B’s business and assets based on the information.
 
 　The SESC filed administrative monetary penalties in the amounts as follows:
(i) 620,000 yen against the Officer; and
(ii) 1,240,000 yen against the Firm B.

Recommendation for an administrative monetary penalty payment order for using fraudulent means related to shares of Okamura Foods Co., Ltd. and five other securities.

<Summary>

　The SESC recommended that the Prime Minister and the Commissioner of the FSA issue an administrative monetary penalty payment order of 100,000 yen against an individual investor who used fraudulent means in violation of the Financial Instruments and Exchange Act.
 
　The SESC found that the individual investor (“Investor”) had used fraudulent means related to shares of Okamura Foods Co., Ltd. and five other securities (collectively “Securities”). The Investor placed market-on-close sell orders of the Securities that were not intended to be executed and changed the orders to a higher limit price that was not likely to be filled immediately before closing. As a result, other investors were led to refrain from the sale and purchase of the Securities.
Through this means, the Investor had intended to mislead other investors into believing that the statuses of sale and purchase orders of the Securities would be maintained until closing time, and the behavior of the Investor practically affected the price of the Securities and then the Investor purchased the shares of the Securities.