Prof. Dr. Katsunori Kai, Professor of Law, Waseda University, Former Public Prosecutor Mr. Suzuki, Public Prosecutor, Law firm of Nagashima, Ohno and Tsunematsu (NO&T)
Anti-Financial Crime Provisions
A) Fraud (the dishonest inducement of conduct for another’s benefit, by false representation) Criminal Law
Article 246: Fraud
Article 246-2: Computer Fraud
B) Offences involving fraud, but in specific areas of activity such as the financial markets, taxation, company law or obtaining services (and credit) To evade paying income tax or to receive refund of income tax by false information or other foul play. Income Tax Law: Article 238
Corporation Tax Law: Article 159
Counterfeiting of and making false entry in securities Criminal Law
Article 162: Counterfeiting Securities
Article 163: Uttering Counterfeit Securities
C) Misusing non-public price sensitive information that has been obtained in a special relationship such as a corporate insider
Financial Instruments Transaction Law (Japanese SOX Act) Article 166 and 167: Insider trading
Article 166 prohibits related parties to listed company, knowing “the unpublished significant fact” of listed companies, to buy or sell specified securities before the release of that information. Article 167 prohibits a purchaser by open market, knowing “the unpublished significant fact” of listed companies, to buy or sell specified securities before the release of that information.
The Nippon Broadcasting case (insider trading)
The suspect, the effective Managing Director of MAC Asset Management Corporation (corporate suspect), acquired knowledge via Livedoor executives that Livedoor had decided to carry out an open purchase of Nippon Broadcasting shares in order to establish a share position of not less than five percent of the voting rights of all shareholders. The suspect contrived to obtain profits by purchasing Nippon Broadcasting shares before the publication of the open purchase and indeed did purchase the shares.
The Homac case (insider trading)
Homac Corporation (thereafter Homac) and Kahma Corporation (thereafter Kahma) had made a decision on transference of their shares so as to establish a joint holding company together with Daiki Corporation, and published this decision in July 2005. The suspect, the Executive Director of a company which had contracted with Homac and Khama to draw up materials for distribution to the press, obtained knowledge of the above decision at the time of entering into the contract. The suspect then purchased a total of 21,000 shares in Homac and Kahma for a sum of approximately 32,410,000 yen during May and June 2005, which was before the publication.
The Nishimatsuya Chain case (insider trading)
Nishimatsuya Chain Corporation and another four companies had made a decision to divide shares of each company and published the decision during the period between December 2005 and January 2006. The suspect was an employee of a newspaper company which had a contract with a particular advertising agency which was commissioned by the above five companies to publish the legal notification of the decision. Through his duties, the suspect acquired knowledge of the above decision and purchased a total of 94,400 shares of above companies for a sum of approximately 243,320,000 yen during December 2005 and January 2006, which was before the publication.
D) Manipulating investment (and commodity) prices by false representation or improper dealing
Japanese SOX Act
Article 159 Section 2: Manipulating investment price by false representation or improper dealing Article 159 Section 2 prohibits-
1) To mislead another person that the securities trading prosper, to trade...
Please join StudyMode to read the full document