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Thursday, April 29, 2010

Day traders sentenced for fraud

Staff writer

In the first ruling of its kind, the Tokyo District Court on Wednesday sentenced three day traders to suspended prison terms for manipulating stock prices.

The court also fined the three from ¥1.5 million to ¥3 million, as well as levied an additional penalty of a combined ¥226.61 million.

According to the ruling, Naoaki Matsumura and Kanji Miura, both 28, who were Waseda students at the time, and Matsumura's 26-year-old brother, Takahiro, conspired to manipulate the stock market in June 2006.

The trio bought shares of Hitachi Zosen Corp. and then-Mitsui Mining Co., using a large number of false buy orders from different accounts to raise the firms' share prices from ¥7 to above ¥12, the court said. They then sold about 2.4 million shares to earn more than ¥7 million.

Naoaki Matsumura, the former head of a restaurant-chain operator, was handed a 26-month prison term and a ¥2.5 million fine, while Miura, a board member of a real estate company, was handed a two-year prison term and a ¥3 million fine. Takahiro Matsumura, who is unemployed, received an 18-month term and a ¥1.5 million fine. The prison sentences were suspended for four years.

All three men had pleaded guilty.

"Such acts of manipulation by the suspects mislead investors to believe that the stock market takes its natural course and possibly cause (investors) unexpected losses," the ruling said.

According to earlier reports, Naoaki Matsumura and Miura were members of a Waseda University day traders club called Money Game Aikokai (Money Game Lovers).

The men engaged in day trading from a rented room in the Roppongi Hills complex in central Tokyo, earning a huge amount in illegal profits through manipulation, according to the reports.

While still a student, the elder Matsumura reportedly spent the money he made on a luxury apartment and an expensive car.

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The Japan Times

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