FSA fines individual for insider trading
Following an investigation by the Securities and Exchange Surveillance Commission ("SESC"), on 27 February 2013 an individual was fined ¥2.63 million by the Financial Services Agency ("FSA") for trading on inside information contrary to the Financial Instruments & Exchange Act (the "FIEA"). According to the FSA, the individual obtained inside information regarding a proposed takeover bid of Sankei Building Co., Ltd, a company listed on the Tokyo Stock Exchange, and acting on such information, placed orders in his own name and that of two other brokers for a total of 6,000 shares worth approximately ¥1.79 million prior to the public announcement of the takeover bid.
As mentioned in our previous updates, the Japanese authorities are taking a tougher stance on insider dealing cases, and this case provides another such example.
New Ace Asset Management's licence revoked
On 8 March 2013, the Kanto Finance Bureau (the "KFB") announced that it had taken administrative action against New Ace Asset Management ("NAAM"), an investment advisory company, for violations of the FIEA. The violations included (i) failing to ensure there were an adequate number of qualified personnel working at the company, (ii) failing to have proper governance structures in place, (iii) failing to give the KFB any explanation of transactions made with clients, (iv) disobeying repeated instructions from the KFB to eliminate the company's net negative equity position, and (v) failing to submit ledgers to the KFB in contravention of applicable laws and regulations.
The KFB revoked NAAM's registration licence and issued a Business Improvement Order against the company. Such orders require NAAM to implement measures to give proper explanations to clients regarding administrative actions taken by the company and to take necessary steps to protect investors. In addition, NAAM is under an obligation to provide a report to the KFB by next month outlining the steps taken towards implementing the Business Improvement Order.
The KFB is part of the Ministry of Finance's Finance Bureau responsible for the Kanto region and monitors securities transactions and compliance with the FIEA within its jurisdiction.
Antitrust chief promises tough enforcement
Kazuyuki Sugimoto took office as the new chairman of the Japan Fair Trade Commission (the "JFTC") in early March 2013. The JFTC is one of the main bodies responsible for investigating and combating corruption in Japan and enforces Japan's Anti-monopoly Act with a view to maintaining fair and free competition in the market. On taking up this position, Sugimoto stressed that the JFTC's role in enforcement and promotion of fair competition is even more important given the difficult economic conditions facing Japan. Sugimoto promised JFTC would be committed to ensure 'rigorous and efficient enforcement' of Japan's antitrust laws by countering bid-rigging and price-fixing cartels in Japan's markets.