Tokyo Stock Exchange Imposes Penalty On Eiwa Securities Co., Ltd.

The TSE imposed a penalty of JPY 12 million on Eiwa Securities Co., Ltd. (“Eiwa Securities”) for the act of making purchase or sale transactions of a listed security with the purpose making the price fluctuate. The TSE also requested Eiwa Securities to submit a business improvement report that includes (i) clarification of locus of responsibility for the violation, (ii) a sweeping reform of the trading monitoring structure for ensuring fair transactions, and measures to be taken to prevent a recurrence and eradicate all illegal action (including ensuring strict compliance by all directors and staff), (iii) enhancement and strengthening of internal control structure.

From September 13, 2005 to February 1, 2006, a dealer in the Osaka Stock and Bond Dealing Department of Eiwa Securities over the course of business placed buy and sell orders 8 times, with no intention of execution, in relation to 5 listed stock issues. He intended to make the prices move advantageously to his own positions by making the price for the stocks fluctuate.

The above act is acknowledged to be an ‘act of making purchase or sale transactions of a listed security with the purpose of making the price of said security fluctuate’ as defined in Item 9, Paragraph 1 of Article 42 of the Securities and Exchange Law.