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Pair plead guilty to insider trading

Written by Writer on Wednesday, November 12th, 2008

Pair plead guilty to insider trading

Kyodo News

A former employee of Nomura Securities Co. and his friend pleaded guilty at the Tokyo District Court Tuesday to charges of insider stock trading.

Li Yu, 31, and Su Chunguang, 38, both Chinese nationals, entered their pleas at the first hearing of their trial.

Li and Su were charged with violating the Financial Instruments and Exchange Law, which prohibits anyone from trading in stocks based on insider information.

In an opening statement outlining the nature of the alleged crime, the prosecution said Li had obtained insider information while working for Nomura’s corporate information division, which handles corporate mergers and acquisitions.

Su traded shares after receiving information obtained by Li. The two split the costs and profits linked to the stock trading, the prosecution said. The pair earned about ¥13.7 million through insider deals involving the shares of four companies, the statement said.

According to the indictment, Li obtained insider information that major drugmaker Eisai Co. planned to turn clinical reagent maker Sanko Junyaku Co. into a wholly owned subsidiary. Li, in conspiracy with Su, unlawfully traded in shares of Sanko Junyaku in March 2007 before the information was made public.

The two later traded in shares of medical support provider Site Support Institute Co. using insider information.

Su also traded in shares of Fujitsu Devices Inc., a subsidiary of electronics giant Fujitsu Ltd., and Asahi Soft Drinks Co., a subsidiary of major brewer Asahi Breweries Ltd., after receiving information from Li, but without disclosing these transactions to him. Fujitsu Devices was later renamed Fujitsu Electronics Inc.

Li and Su were arrested in April on suspicion of insider trading.

Following the scandal, the Financial Services Agency issued an order in July for Nomura Securities, Japan’s top brokerage, to improve its internal management.

The Japan Times
Wednesday, Nov. 12, 2008

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News Topics : Asahi Breweries, Chinese Nationals, Clinical Reagent, Corporate Mergers And Acquisitions, Eisai, Exchange Law, Fujitsu Ltd, Information Division, Insider Deals, Insider Information, Insider Stock, Insider Trading, Internal Management, Japan Times, Kyodo News, Li Yu, Mergers And Acquisitions, Nomura Securities, Soft Drinks, Tokyo District Court