Short-selling in breach of the Law
In November 2001 the company executed short-selling of stocks on its own account without legally required disclosure of the fact of short-selling to the stock exchange many times. The company failed to borrow stocks from a securities finance company (SFC), though the Branch intended to, upon short-selling. (Short-selling settled by borrowing stocks from SFC was not required to disclose the fact of short-selling to the stock exchanges.)
In addition, the company was found to have conducted short sales at a price lower than the latest published price immediately prior to the short sale.
The conduct above was found to violate the Article 26-3 (1), the Article 26-4 (1) of the Cabinet Order (the Securities and Exchange Law) and the Article 162 (1) (i) of the Law, both of which regulate short-selling.
