A person walks past a signboard of SMBC Nikko Securities in Tokyo on March 24, 2022. Japan’s Financial Services Agency on Friday, Oct. 7, 2022 ordered brokerage SMBC Nikko Securities to suspend its block trading operations for three months as part of penalties in a market manipulation case. (Kyodo News via AP, File)
TOKYO (AP) — Japan’s Financial Services Agency ordered brokerage SMBC Nikko Securities to suspend its block trading operations for three months from Friday as part of penalties in a market manipulation case.
That follows the arrest of its vice president, Toshihiro Sato, and several other employees on suspicion they put in massive buy orders to prop up stock prices of certain shares.
The company had already suspended its block trades due to the scandal. In a written statement it apologized and said it was taking the penalties “very seriously.” SMBC Nikko Securities and its parent company, Sumitomo Mitsui Financial Group, the country's second-biggest financial group, also outlined plans for improving their governance.
The Securities and Exchange Surveillance Commission, the government body overseeing stock transactions, filed formal accusations against SMBC Nikko and its workers earlier this year of violating the Financial Instrument and Exchange Act.
The case involves big purchases of shares just before the market closed to push their prices higher with the intent of using those prices for clients' block sales overnight.
The investigation into the transactions has taken a big bite out of the company's revenue for fees and underwriting in this financial year.
Late in September, SMBC Nikko announced that regulators had recommended administrative penalties for making illegal share purchases aimed at manipulating prices; inadequate trade screening systems and management of block trade and “inappropriate” management of dealings between the brokerage and SMBC’s banking business. The company also recently set up a business risk control division.
On conviction, violations of the Financial Instrument and Exchange Act carry a maximum penalty of 10 years in prison, a 10 million yen ($82,000) fine, or both. A company faces a fine of up to 700 million ($5.8 million).
Before you consider Sumitomo Mitsui Financial Group, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Sumitomo Mitsui Financial Group wasn't on the list.
While Sumitomo Mitsui Financial Group currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Click the link below and we'll send you MarketBeat's guide to investing in 5G and which 5G stocks show the most promise.
Get This Free Report