Financial Regulatory Forum

Japan regulator investigates BNP Paribas – newspaper

October 15, 2009

BNPPARIBAS-FORTIS/    TOKYO, Oct 15 (Reuters) – Japan’s securities regulator is probing allegations of market manipulation in share trading by BNP Paribas <BNPP.PA>, the Asahi newspaper reported, in what would be another regulatory issue for the French bank following a controversial deal last year with a failed property developer.
   An official at the Securities and Exchange Surveillance Commission told Reuters it had been inspecting BNP Paribas since March, but declined further comment. 
   BNP Paribas spokesman Daniel Boyd said: “We have not been officially notified by the authorities. We cannot comment at this time.”
   The Asahi, without quoting sources, said BNP Paribas Securities (Japan) Ltd may face a suspension of operations, with the commission planning to recommend punishment in the case.
   The newspaper quoted market sources as saying the case involved allegations of improper trading in shares in mobile phone company Softbank Corp <9984.T>.
   Softbank spokesman Fumihiro Ito said he had no knowledge of the matter and declined further comment.
   Last year, Japan’s Financial Services Agency ordered the French bank to tighten its internal controls following a controversial financing deal with a failed property investor, Urban Corp. [ID:nT183381]
   The Asahi reported BNP Paribas was accused of placing large buy orders for Softbank shares near the market close so trades in the shares ended the day unpriced. It said this was done as BNP Paribas wanted to avoid reporting a lower price for the shares.
   The commission can recommend punishments to its parent regulator, the FSA, after its investigations. The Asahi said the FSA was likely to consider steep penalties such as suspending BNP’s operations.
   The Nikkei newspaper said investigations of BNP Paribas were ongoing in the case of Urban, the failed property developer.
   The commission had found BNP Paribas did not report trading in Urban shares by its dealers to the authorities, which the securities watchdog deemed false reporting, the Nikkei reported on Thursday.
   The newspaper said on Wednesday that BNP Paribas also faced a $1.1 million fine from the Japan Securities Dealers Association over the $315 million Urban financing deal, which was not disclosed until after the Japanese firm collapsed. [ID:nBNG384362]  (Reporting by Taiga Uranaka; Editing by Rodney Joyce & Ian Geoghegan)) ((taiga.uranaka@thomsonreuters.com; +81-3-6441-1813; Reuters Messaging: taiga.uranaka.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
Keywords: BNPPARIBAS/JAPAN
  
Thursday, 15 October 2009 05:53:32RTRS [nT76589   ] {C}ENDS

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