ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

SMBC Nikko ordered to pay $5.3m fine over market manipulation

Japan brokerage accused of propping up certain stock prices to stabilize them

In addition to the fine, the major brokerage's former executive Teruya Sugino was sentenced to 18 months in prison. Five other executives are awaiting hearings.   © Reuters

TOKYO (Kyodo) -- A Japanese court on Monday ordered SMBC Nikko Securities Inc. to pay a fine of 700 million yen ($5.3 million) and a forfeiture of 4.47 billion yen for manipulating the market by illegally propping up certain stock prices to stabilize them.

The Tokyo District Court also sentenced the major brokerage's former executive Teruya Sugino, 57, to 18 months in prison, suspended for three years. Five other former executives at the brokerage, including its former deputy president, are also charged in the trading scandal but their first hearings are yet to be decided.

Prosecutors had sought a penalty of 1 billion yen and a forfeiture of 4.44 billion yen against SMBC Nikko. For Sugino, they had demanded a prison term of 18 months.

According to the ruling, SMBC Nikko violated the financial instruments and exchange law by propping up the prices of 10 individual stock issues before selling them in "block offering" transactions. Sugino was involved in one of the cases.

In a block offering transaction, a brokerage mediates trading between large shareholders who want to sell chunks of shares and investors hoping to buy them during off-hours trading. The brokerage profits from the difference between the purchase and sale prices.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more