Written by Kantaro Komiya
(Reuters) – An employee of the Tokyo Stock Exchange is currently under investigation by Japan’s financial watchdog for suspected insider trading, as announced by its parent company Japan Exchange Group (JPX) on Wednesday.
The Securities and Exchange Surveillance Commission (SESC) is leading the investigation into the employee, with JPX pledging full cooperation with the probe in a statement.
“We sincerely apologize for any inconvenience and concern this may cause among our listed companies and other related parties,” stated JPX.
According to broadcaster TBS, the employee, a man in his 20s, allegedly provided information on listed companies’ tender offers multiple times this year to a relative, who then used the information to profit from equity trading worth several hundreds of thousands of yen.
The SESC initiated the investigation around September, as reported by the newspaper that first broke the news.
Neither the employee nor the companies involved in the alleged trading were identified by JPX or in media reports.
A JPX spokesperson informed Reuters that the company had no further comments to add beyond their initial statement.
This development follows a recent incident involving suspected insider trading by a judge temporarily assigned to Japan’s Financial Services Agency. The SESC launched a probe into the judge in August for trading shares based on undisclosed information obtained during work, according to local media.
A spokesperson for the SESC declined to comment on both cases.
Deputy Chief Cabinet Secretary Kazuhiko Aoki expressed deep regret over market authority members being investigated by the SESC.
“We must take all necessary measures to prevent such occurrences and maintain trust in Japan’s financial markets,” Aoki stated at a regular press conference.
Insider trading is a violation of Japan’s Financial Instruments and Exchange Act, with potential penalties including up to five years in prison, a fine of up to 5 million yen ($33,097), or both.
($1 = 151.0700 yen)