UBS Securities states that its Compliance Department provides in-house training programs to its employees on undisclosed corporate information, and strictly controls undisclosed corporate information in accordance with its in-house rules in order to prevent unfair trade. UBS Securities also states with regard to research analyst reports that the Equity Research Department examines if undisclosed corporate information is included in such reports.
However, the Head of the Equity Research Department and the Head of the Compliance Department have not taken appropriate measures to control undisclosed corporate information, thus a researcher at the Equity Research Department who obtained, from a listed company, information on the purchase of capital shares and the downward revision of the company's account statement, put the information in his research analyst report without being aware that such information falls under the classification of undisclosed corporate information. Moreover, the Equity Research Department, which is in charge of examining the report, failed to realize such information was included. As a result, from April 2003 onward, UBS Securities posted the research analyst report with the undisclosed corporate information on its website.Additionally, the researcher explained the summary of the report at in-house meetings and the Equity Research Department emailed the report to a large number of its customers. UBS Securities has thus been conducting its business in such state recognized as having insufficient internal control of undisclosed corporate information from the viewpoint of preventing unfair trade.
The aforementioned act of UBS Securities is acknowledged to fall under the act of conducting business under ''the state that a securities company is not deemed to have a sufficient degree of internal control for the prevention of unfair trade by making use of information pertaining to corporations, in the light of its control of information pertaining to corporations which it obtained'' provided for in Item (4), Article 10 of the Ordinance of Cabinet Office Concerning Regulation, etc. of Conducts of Securities Company as applied by Paragraph 25, Article 24 of Ordinance of Cabinet Office Foreign Securities Firms based on Item (2), Article 43 of Securities Exchange Law as applied by Paragraph 1, Article 14 of the Law on Foreign Securities Firms.
