Crime & Courts

TSE Employee Under Probe for Alleged Insider Trading; SESC Investigating Whether Man Gave Information to Relative

Reuters file photo
People look at a stock quotation board at the Tokyo Stock Exchange in Tokyo on Aug. 6.

The Yomiuri Shimbun

15:59 JST, October 23, 2024

An employee of the Tokyo Stock Exchange who works in a section related to corporate information disclosure is being investigated on suspicion of insider trading conducted with information obtained through his duties, it has been learned.

The employee is suspected of leaking information on a takeover bid regarding a TSE-listed company to his relative before the information was publicly announced, according to sources.

The Securities and Exchange Surveillance Commission (SESC) is conducting an investigation with an eye to filing a criminal complaint with the Tokyo District Public Prosecutors Office, according to the sources.

Having confirmed the suspicious transactions, the SESC recently began the investigation of the employee and his relative to examine their trading situations and other factors.

The TSE said it removed the employee from his duties involving the handling of corporate information prior to a public announcement, the sources said.

According to the sources, the employee belonged to a department in charge of companies’ disclosing important management information to the market at appropriate times.

Listed companies need to inform the TSE in advance when they make a takeover bid, merger, acquisition and other management decisions. The employee in question is suspected of having learned information that was not yet disclosed about a listed firm he found out about through his duties and recommended that his relative trade shares of the firm.

Tokyo-based Japan Exchange Group, Inc., which owns the TSE, admitted Wednesday that a TSE employee is being investigated by the SESC. The company released a comment saying that it will fully cooperate with the investigation.

“We offer our deepest apologies for troubles and worries the incident has caused to a great many parties,” the company said.

4,000 listed companies

The TSE is the largest stock exchange in Japan for buying and selling stocks and bonds. It screens companies’ worthiness to be listed and publicizes important corporate information.

About 4,000 companies are listed on the TSE’s Prime, Standard and Growth sections as of October.