April 21, 2000

        The Securities and Exchange Surveillance Commission (SESC) conducted the inspection of Credit Lyonnais Securities Europe-Swiss AG, Tokyo Branch (Credit Lyonnais) based on the provisions of the Law on Foreign Securities Firms (LFSF) and found legal violations described below.
        SESC sent the recommendation to the Financial Reconstruction Commission (FRC) and the Commissioner of Financial Supervisory Agency to take disciplinary action against Credit Lyonnais pursuant to Article 29(1) of FRC Establishment Law on April 21, 2000.

(1) Provision of property gains to give customers additional profit
        On February 1st, 2000, with the involvement of the senior manager of the Japanese equities sales division, Credit Lyonnais provided approximately \ 640,000 property gains for the purpose of adding to a customer's profit concerning a stock's sales after switching the customer's stocks' sales in the session to its own account, the company(buyer) executed the trading of these stocks with the customers(seller) at the price higher than the value weighted average price out of the session.

(Violation of LFSF Article 14(1))

(2) Solicitation with promise of special profit
        On January 16, 1998, with the involvement of the executive senior manager of the Japanese equities sales division, Credit Lyonnais solicited a customer for securities index futures trading, with a promise to the customer that the company would switch the trading which would be produced gains on its own account to the customer's account.

(Violation of LFSF Article 17(1), which is the law before the amendment in 1998)

(3) Submission of falsified transaction reports to customer
        On September 11, 1998, with the involvement of the senior manager of the head of operations for Japan, Credit Lyonnais deliberately submitted the falsified reports on stock trading which resulted from execution of individual securities option trading.

(Violation of LFSF Article 37(3), which is the law before the amendment in 1998)