TOKYO -- Japan's Securities and Exchange Surveillance Commission is prepared to recommend administrative action against Credit Suisse Securities (Japan) after an analyst at the brokerage was accused of leaking nonpublic information about a listed company's earnings.
The incident occurred in September. The brokerage apparently learned that a company whose shares trade on the Tokyo Stock Exchange's big board was going to upgrade its earnings forecast.
An analyst is accused of tipping off the brokerage's sales team and telling clients. Sales representatives are alleged to have used this nonpublic information to solicit clients.
The analyst and others did not give due thought to whether they were sharing material information about the company, a person familiar with the matter said. Brokerages are required under law to properly manage such information, which can affect investment decisions.
The securities watchdog appears to have found fault with the brokerage's internal controls and has decided to recommend administrative action by the Financial Services Agency.
The FSA recently ordered Deutsche Securities to improve its operations after that brokerage was involved in a similar incident in December.