Japan SESC to fine Prospect Asset Management, Inc. for insider trading


The Securities and Exchange Surveillance Commission (SESC), today, made a recommendation to the Prime Minister and the Commissioner of the Financial Services Agency that an administrative monetary penalty payment order be issued in regard to insider trading of the shares of Tri-Stage inc. by Prospect Asset Management, Inc. (PAMI) pursuant to Article 20(1) of the Act for Establishment of the Financial Services Agency. This recommendation is based on the findings of the investigation into insider trading whereby the following violations of laws and ordinances were identified.

PAMI is a Hawaiian company whose principal place of business is located in the State of Hawaii, United States of America. PAMI, substantially, has the authority to manage the assets invested in Shareholders’ Consensus Fund L.P. (SCF), which was registered in the Cayman Islands as a limited partnership. PAMI’s investment officer in regard to negotiation to conclude a contract with Tri-Stage, with the knowledge of a material fact concerning a decision by the organ of Tri-Stage which is responsible for making decisions on the execution of the operations to acquire its own shares, from September 25, 2015 to October 19, 2015, which period is prior to the publication of the above fact issued on October 20, 2015, as the management of the assets invested in SCF, purchased a total of 36,500 shares of Tri-Stage for 74,767,600 yen. Of that amount, 66.6746% is equivalent to the contribution ratio of its parent company of PAMI etc. to SCF as of October 2015 and was purchased on PAMI’s own account, and the rest was purchased on the accounts of other investors of SCF.

The actions mentioned above conducted by PAMI were recognized as actions “in violation of the provisions of Article 166(1) or (3) in effecting a Sale and Purchase, etc. prescribed in Article 166(1)” as stipulated under Article 175(1) of the Financial Instruments and Exchange Act (FIEA).

Pursuant to the FIEA, the amount of the administrative monetary penalty applicable to the above violations is 3,290,000 yen.

To see the complete announcement, click here.

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