SECURITIES AND EXCHANGE
SURVEILLANCE COMMISSION
February 16, 2001
The Securities and Exchange
Surveillance Commission (SESC) conducted inspections of UBS Warburg Securities
(Japan) Limited, Tokyo Branch (UBS Securities) and Commerz Securities (Japan)
Company Limited, Tokyo Branch (Commerz Securities), based on provisions of the
Law on Foreign Securities Firms (LFSF), and found legal violations by employees
of the both companies as described below.
Today,
the SESC sent recommendations to the Prime Minister and the Commissioner of
Financial Services Agency (FSA) to take appropriate actions pursuant to Article
20(1) of the FSA Establishment Law.
Act of making a series of securities transactions to create
artificial market prices which does not reflect the actual state of the market
- UBS Securities
In relation to an Equity Exchangeable Bond (EB) for stocks of a
listed company, for the purpose of lowering the stock price, an equities
trader sold the stocks by placing a series of lower limit or no limit orders
from 14:59 until the close on May 10, 2000. In fact whether additional
interests (bonus coupon) of the EB were payable was dependent upon the stock
price on the very date of May 10, 2000. As a consequence of the deliberate
selling, the stock price fell short of the benchmark price for additional
interests, and the payment worth approximately 70 million-yen could be
avoided.
- Commerz Securities
In relation to another EB for stocks of a listed company, for
the purpose of lowering the stock price, equities traders sold the stocks by
placing a series of lower limit orders from 14:58 until the close on August
15, 2000. In fact whether additional interests (bonus coupon) of the EB were
payable was dependent upon the stock price on the very date of August 15,
2000. As a consequence of the deliberate selling, the stock price fell short
of the benchmark price for additional interests, and the payment worth
approximately 77 million-yen could be avoided.
(Violation of a Ministerial Ordinance, Article 42(1)(ix) of
the Security and Exchange Law including the application of Article 14(1) of the
LFSF)

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