On May 17, 2001, BNP PARIBAS securities placed, on its own account, a large amount of the sell order of a stock at the limited price for the purpose of making the closing price of the stock lower than the "strike price". As the result, the price went down toward the close. BNP PARIBAS securities was one of the arranger of the Exchangeable Bond ("the EB" hereafter) for the stock and had a contract with the issuer of the EB to sell a certain amount of the stock at a certain price when the closing price of the stock was below "strike price".
The acts above are found to violate the Article 4 (iii) of the Ordinance of the Cabinet Office Concerning the Regulations, etc. of Conducts of Securities Companies and the Article 42 (1) (ix) of the Securities and Exchange Law applied based on the Article 14 (1) of the Law on Foreign Securities Firms.
Financial Services Agency suspended BNP PARIBAS Securities from all the stock trading on its own account from December 9 to 20, 2002 except the execution of transactions contracted on or before December 6.
