SMBC Nikko Securities executives arrested Is it a mass purchase against "short selling"?

In the case where four executives of SMBC Nikko Securities, a major securities company, were arrested on suspicion of market manipulation, the four maintained their stock prices against the "short sale" that led to a drop in stock prices for certain stocks. According to an interview with the people concerned, it was found that there was a suspicion that he was illegally buying a large amount of stock.

The Tokyo District Public Prosecutor's Office is proceeding with the elucidation of the details of the transaction.

Trevor Hill (51), general manager of SMBC Nikko Securities Equity Headquarters, and Alexander Avacantz (44), deputy general manager, all fell in stock prices for certain stocks in about a year until November. On the 4th, he was arrested by the Tokyo District Public Prosecutor's Office on suspicion of market manipulation in violation of the Financial Instruments and Exchange Act, alleging that he had made an illegal transaction to prevent this.

The problem in this case was a transaction related to a "block offer" that took place without going through the market.

In this transaction, if a shareholder who wants to sell a large amount of stock sells in the market at one time, the stock price will plummet, so in order to prevent this, the securities company will buy the stock and sell it to general investors. For securities companies, the difference between the amount bought from shareholders and the amount sold is the profit.

On the other hand, if the stock price drops significantly by the time of the actual transaction, shareholders may forgo the sale itself and securities companies may not be able to make a profit.

According to the people concerned, there is a new suspicion that the four people were fraudulently buying a large amount of stocks in order to maintain the stock price in response to a series of "short selling" orders from investors that led to a drop in the stock price. I understand.

The Special Investigation Department has not disclosed the approval or disapproval of the four, but according to people familiar with the matter, Trevor's chiefs have denied any illegal hearing before the arrest.

The Special Investigation Department is expected to proceed with the elucidation of the actual situation by analyzing the materials seized in the search to the head office.