| The Securities and Exchange Surveillance Commission (SESC) conducted 
                an inspection of Tokyo-Mitsubishi Securities Co., Ltd. (Tokyo-Mitsubishi), 
                based on provisions of the Securities and Exchange Law (SEL), 
                and found legal violations described below.
 Today, the SESC sent a recommendation to the Prime Minister 
                and the Commissioner of Financial Services Agency (FSA) to take 
                disciplinary actions and appropriate actions against Tokyo-Mitsubishi 
                pursuant to Article 20(1) of the FSA Establishment Law. 
              Act of making a series of securities transactions to create 
                  artificial market prices which does not reflect the actual state 
                  of the markets
 In relation to an Equity Exchangeable Bond (EB) for stocks of 
                  a listed company, for the purpose of lowering the stock price, 
                  Tokyo-Mitsubishi sold the stocks by placing a series of lower 
                  limit or no limit orders from 14:59 until the close on January 
                  17, 2001. In fact, whether additional interests (bonus coupon) 
                  of the EB were payable was dependent upon the stock price on 
                  the very date of January 17, 2001.
 
 As a consequence of the deliberate selling, the stock price 
                  fell short of the benchmark price for additional interests, 
                  and the payment worth approximately 365 million-yen could be 
                  avoided.
 
 (Violation of a Ministerial Ordinance, Article 42(1)(ix) of 
                  the SEL)
 
Solicitation with promise of special profit
 In June 1998, Tokyo-Mitsubishi bought bonds from a corporate 
                  customer, and then sold the bonds to its parent company, by 
                  order of the customers. Thereafter, the customers requested 
                  Tokyo-Mitsubishi to annul the bonds transactions, nevertheless.
 
 In July 1998, Tokyo-Mitsubishi with an agreement of the customers 
                  carried out other transactions, which could cancel out the effects 
                  of the original transactions.
 
 Under the newly proposed transactions, Tokyo-Mitsubishi bought 
                  back the bonds from the original buyer, and sold back to the 
                  customer concerned.
 
 As the second buy-back and sale-back were conducted by the same 
                  price as the original transactions, the brokerage commission, 
                  which Tokyo-Mitsubishi had gained from the original transactions, 
                  was provided to the customers. Moreover, Tokyo-Mitsubishi promised 
                  the exemption of a brokerage commission from those reverse transactions. 
                  This can be identified as an act of the solicitation into securities 
                  transactions with a promise of special profit.
 
 (Violation of a Ministerial Ordinance, Article 50(1)(vi) of 
                  the SEL, prior to the amendment of December 1,1998)
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