Crime & Courts

Judge Under Investigation of Suspected Insider Trading; Large Gains from Stock Trading Soon After FSA Assignment

Yomiuri Shimbun file photo
Financial Services Agency

The Yomiuri Shimbun

7:00 JST, November 4, 2024

A judge, who is under investigation on suspicion of insider trading during his temporary assignment to the Financial Services Agency, is suspected of having earned over ¥1 million using undisclosed information within four months of his assignment. This is more than 10 times the profit he made in April, when he was assigned to the agency.

The profits he gained through suspected insider trading are believed to have amounted to several million yen in total. The Securities and Exchange Surveillance Commission (SESC) is investigating the case, suspecting that the judge gradually increased transactions and escalated his misconduct.

The judge, a man in his 30s, was temporarily transferred from the Supreme Court Secretariat to the agency, where he was assigned to the Corporate Accounting and Disclosure Division of the Policy and Markets Bureau that oversees the review of documents submitted by companies planning tender offers.

According to informed sources, the judge traded stocks from multiple companies in relation to tender offers soon after he was assigned to the FSA and gradually increased the amount of transactions. While he had earned profits of about ¥100,000 in April, his profits reportedly increased to over ¥1 million in August.

The SESC learned about the judge’s suspicious transactions and launched an investigation in August. In September, the securities watchdog conducted a compulsory search on the premises of related parties on suspicion of violating the Financial Instruments and Exchange Act.

Companies planning a takeover bid are required to submit documents to the finance bureau in advance. The judge allegedly obtained information prior to its official announcement in his capacity of providing guidance and advice to the finance bureau. Furthermore, he is also believed to have traded stocks of companies in which he was not involved based on a list of companies planning tender offers shared among members of the division.