Bloomberg News

SMBC Nikko Investigated by Japan Watchdog for Insider Trading

October 05, 2011

Oct. 6 (Bloomberg) -- SMBC Nikko Securities Inc. is being investigated by Japan’s Securities and Exchange Surveillance Commission for a possible insider trading violation by an executive, the brokerage said in an e-mailed statement.

The executive allegedly told an acquaintance that management of Enoteca Co., a Japanese wine importer, were preparing to buy the company’s shares through a tender offer, the Asahi newspaper reported earlier, without saying where it got the information. The acquaintance traded the stock before the management buyout was announced, the newspaper said.

“We are fully cooperating with the commission’s investigation,” SMBC Nikko said in the statement, declining to comment further. The brokerage is a unit of Sumitomo Mitsui Financial Group Inc., .Japan’s second-biggest banking group by market value.

The SESC searched SMBC Nikko’s office and the executive’s house, and will continue the probe before determining whether to recommend charges by prosecutors, the newspaper said. An SESC spokesman, who didn’t want to be identified, citing the commission’s policy, declined to comment.

--Editors: Russell Ward, James Gunsalus

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


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