SESC Latest Topics No.111＜June 2026＞
Last Updated : June 26, 2026
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.
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March 31, 2026: |
<Summary> As a result of an investigation of BANK INNOVATION, Inc. (“BANK”) and Prosperity Assurance Inc. (“Prosperity”), the SESC found that BANK, Prosperity, and Shoichiro Ando, the Representative Director of both companies, had engaged, without registration, in the following business activities: (i) the offering or private placement of interests in collective investment schemes established under foreign laws and regulations, and (ii) intermediary services for the conclusion of discretionary investment management contracts. Accordingly, on March 31, 2026, the SESC filed a petition with the Osaka District Court seeking an order to prohibit and suspend the aforementioned activities. |
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| April 17, 2026: |
Recommendation based on Inspection Results for Buddy Capital Co., Ltd. |
| May 15, 2026: |
Recommendation Based on Inspection Results Concerning Takumi Investments Co., Ltd. <Summary> As a result of an inspection of Takumi Investments Co., Ltd. (a Type II Financial Instruments Business Operator; Investment Management Business, Operator; and Investment Advisory and Agency Business Operator; hereinafter the “Company”) conducted by the Kanto Local Finance Bureau, it was found that the Company had failed to conduct its investment management business faithfully for customers with whom it had concluded discretionary investment management contracts, and had breached its duty of due care of a prudent manager in connection with its investment advisory business. Therefore, on May 15, 2026, the SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative actions. Specifically, it was found that the Company had continued to manage investments in a final investment target where the person responsible for investment management had himself managed the funds while he had been misappropriating the money; that, after concluding discretionary investment management contracts with four customers, it had used those customers’ investment funds to make redemption payments to existing customers and others instead of investing those funds; and that it had provided customers with management reports containing statements contrary to the facts. These circumstances were found to constitute serious breaches of the duty of loyalty owed to customers with whom the Company had concluded discretionary investment management contracts. In addition, in connection with its discretionary investment management business, the Company was found to have engaged in conduct in violation of laws and regulations, including receiving deposits of a portion of customers’ investment funds into a bank account in the Company’s own name. In addition, the Company provided investment advice on interests in an offshore collective investment scheme formed by a foreign business operator that was not registered for the Investment Management Business, without sufficiently examining, in light of applicable laws and regulations, whether that foreign business operator was required to obtain registration for the Investment Management Business and whether the product could be lawfully handled. Such circumstances were found to indicate that the Company had failed to conduct its investment advisory business with the due care of a prudent manager toward its customers. Furthermore, a website operated by a director of the Company was found to constitute an advertisement of the Company, yet it failed to display matters required by laws and regulations, such as the Company’s trade name, and contained statements on pages describing customer evaluations and similar matters that were materially inconsistent with the facts. |
| May 19, 2026: |
Recommendation Based on Inspection Results for KROSY Inc. <Summary> As a result of an inspection of KROSY Inc. conducted by the Kinki Local Finance Bureau, the following issues were identified with respect to KROSY Inc. (an Investment Advisory and Agency Business Operator; hereinafter, the “Company”): the Company failed to provide investment advisory services to its clients in good faith and engaged in advertising that contained statements materially inconsistent with the facts. Therefore, on May 19, 2026, the SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative actions. Specifically, A, an investment adviser of the Company, used a securities account in his own name to conduct transactions for his own account. In 31 instances, he purchased for his own account 29 Japan-listed stocks on which he later provided investment advice, advised the clients to purchase those stocks while concealing the fact that he owned them, and sold the stocks after providing the advice. The Company’s representative director lacked sufficient awareness of legal compliance, and the Company failed to establish an internal control environment to prevent A’s misconduct; for example, its function for checking conflicts of interest in transactions conducted by officers and employees for their own account was not effective at all. A’s conduct raises serious conflict of interest concerns, and the Company failed to establish a system to prevent such conduct. In addition, the representative director’s attempt to conceal A’s transactions demonstrates disregard for the Company's customers and a betrayal of their trust; accordingly, the Company cannot be regarded as providing investment advisory services faithfully in the interests of its customers. In addition, in advertising on its website, the Company stated, contrary to the facts, that it had provided advice on matters such as the purchase date and purchase price, when in fact it had merely introduced the names of stocks to customers, and presented such information as if the customers had earned profits. This act is deemed to constitute a representation in an advertisement for the investment advisory business that materially differs from the facts regarding advisory performance. |
| May 29, 2026: |
Recommendation Based on Inspection Results for Capital Partners Securities Co., Ltd. and Capital Financial Advisors Co., Ltd. <Summary> As a result of an inspection of Capital Partners Securities Co., Ltd. (a Type I Financial Instruments Business Operator; hereinafter referred to as the “Company”) and Capital Financial Advisors Co., Ltd. (a Financial Instruments Intermediary Service Provider; hereinafter referred to as “CFA”), conducted by the Kanto Local Finance Bureau, it was found that there were issues involving inappropriate business operations related to sale of foreign bonds. Therefore, on May 29, 2026, the SESC recommended that the Prime Minister and the Commissioner of the FSA take administrative actions. Specifically, although the TRY/JPY exchange rate had been on a significant long-term downward trend and the Company had confirmed that the prices of Turkish lira-denominated bonds had not in fact risen and were showing unstable movements, the Company, for the purpose of securing its own profits, solicited customers by intentionally failing to mention the risk that bond prices could decline due to factors such as interest rates and by representing that bond prices would certainly continue to rise stably in the future, or in a manner that could lead customers to believe so, and that gains in foreign currency terms could be realized through sale prior to maturity. In addition, with respect to Turkish lira-denominated bonds, the Company engaged in inappropriate investment solicitation by stating, based on the issuers’ high credit ratings at the time of solicitation, that redemption payments would certainly be received in the future. Furthermore, some of the Company’s sales representatives transferred to CFA, a financial instruments intermediary service provider affiliated with the Company that designates the Company as its affiliated Financial Instruments Business Operator, and it was found that, even after their transfer, they continued to engage in the same inappropriate investment solicitation at CFA. Moreover, although the Company was required to conduct management, etc. over CFA as its outsourcee, it failed to establish any effective management system with respect to CFA, and as a result, it was found that the Company left unaddressed the continued inappropriate investment solicitations by its sales representatives even after their transfer to CFA. |
