1. Short-selling in breach of Securities & Exchange Law
| (1) | During the period from November 16, 1998 until July 31, 2001, the company executed short-selling of stocks on its own account in the execution of borrowing stocks with call option without legally required disclosure of the fact of short-selling to the stock exchanges. |
| (2) | During the period from October 23, 1998 until May 29, 2001, when executing short-selling of stocks on its own account in execution of VWAP (Volume Weighted Averaged Price), the company did not disclose the fact of short-selling to the stock exchanges. In addition, some of them were executed at the prices lower than the latest published price. |
By these series of conducts, the company violated the Article 26-3 (1) and (6), the Article 26-4 (1) and (5) of the Cabinet Order (Securities & Exchange Law) and Article 162 (1) (i) of the Securities & Exchange Law, both of which regulate short-selling.
2. Non-securities business without prior approval or notification
The company conducted the following non-securities businesses without prior approval
by the FSA or notification to the FSA;
| (1) |
Credit derivative transactions. |
| (2) | Intermediation of sale/purchase of interest in limited partnership and limited liability company. |
| (3) | Operations for pursuing business specific entities, etc. |
| (4) | Operations for pursuing business of affiliated companies other than specific entities, etc. |
| (5) | Intermediation of making a silent partnership agreement among parties. |
| (6) | Intermediation of cash lending/borrowing. |
| (7) | Intermediation of commodity derivative transactions. |
By these conducts, the company violated the Article 34 (3) and (4) of Securities & Exchange Law applied based on 14 (1) of the Law on Foreign Securities Firms (LFSF).
