1. Act of making representation of a misleading statement on material matter in connection with handling of private placements of securities

In the Marunouchi Branch of the registered financial institution, which handles private placement of structured bonds of which conditions vary among each customer depending on preference of investment, the following cases of making representation of a misleading statement on material matters in connection with its handling of private placement were found.

(Case One)
Vice President A of the Marunouchi Branch, on June 4 and August 28, 2003, made representation of a misleading statement in soliciting structured bonds to two customers, as if the customers could sell out the bond at a certain price anytime before the maturity date, while it was in fact difficult to do so because of the low level of liquidity.

(Case Two)
Vice President B of the Marunouchi Branch, on July 4, 2003, made representation of a misleading statement in soliciting structured bonds to a customer, as if the customer could receive interests for certain without risking the principal, while there were in fact possibilities of impairing the principal as well as not being able to receive interests because of the fluctuation of exchange rate.


2. Act of handling private placement as a condition of granting credit

In the Marunouchi Branch of the registered financial institution, the following case of the act of handling private placement as a condition of granting credit was found.

(Case)
An employee of the Marunouchi Branch, in April 2003, solicited the offer of acquiring structured bonds to a customer and at the same time proposed the same customer an increase of the amount of a loan to be appropriated for the cost of purchasing the bonds, making the purchase of the bonds a condition for providing the loan.