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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: Steve Lee who started this subject3/4/2002 8:50:36 AM
From: exp   of 99280
 
TOKYO, Feb. 1 — Japan’s top financial watchdog said on Friday it was suspending the Tokyo branch of U.S. brokerage Morgan Stanley from trading on its own account for 24 business days for violating regulations on short-selling.
stacks.msnbc.com
THE FINANCIAL Services Agency (FSA) said the suspension from Feb. 4 to March 8 would not prevent the execution of transactions contracted on or before Friday.
The Ministry of Finance also said it would exclude Morgan Stanley from taking part in its auctions and underwriting of Japanese government bonds.
The suspension and exclusion follows a request for punishment made earlier this week by the Securities and Exchange Surveillance Commission (SESC).
The FSA said Morgan Stanley’s Tokyo office violated an ordinance “by placing a series of lower limit or no limit orders for the purpose of lowering the stock price to a level at which a buying order existed.”
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As a result, the agency said Morgan Stanley created artificial market prices which did not reflect the actual state of the market.
Japan’s financial watchdog said Morgan Stanley also violated other short-selling provisions when it failed to give explicit indication to authorities that it would make a short sale on 40 transactions involving about 1.7 million shares.
Of these, the FSA said 23 transactions involving about 1 million shares were executed at prices lower than the latest published price prior to the short sale.
“We will do all we can to prevent any future recurrence of this issue and will continue to make every effort to ensure that we adhere to the highest possible regulatory standards,” Morgan Stanley said in a statement.
Japanese regulators have been stepping up surveillance of domestic and foreign financial firms in a bid to bolster investor confidence in Tokyo’s ailing financial markets.
In December, the FSA banned the Japanese unit of U.S. brokerage Goldman Sachs Group Inc. from trading stocks on its own accounts for 10 days.
The FSA said Goldman broke securities regulations on 2,368 short-selling transactions between 1998 and 2001, which were not reported to the authorities as such.
With two high-profile foreign brokerages receiving punishments in the last few months, there are rumblings that the FSA is targeting foreign brokers for punishment.
FSA officials dismissed such allegations and pointed out punishments handed down in 2001 to Japanese brokers including Shinko Securities, Tsubasa Securities and Kokusai Securities for violations of market rules.
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