Japan's Financial Services Agency on Friday slapped SBI Securities Co., the biggest online brokerage in the country, with a one-week partial suspension of its operations for alleged stock price manipulation.
SBI has solicited investors to place buy orders for shares in three companies in their initial public offerings, for which the broker served as a lead underwriter, in an attempt to increase the chances those shares would debut above their IPO prices, according to the agency.
The FSA suspended the brokerage from taking orders to trade IPO shares through Thursday and instructed the company to submit plans by Feb. 13 to strengthen internal controls on its IPO business.
The company's employees, given instructions from senior executives, knowingly violated the Financial Instruments and Exchange Act by soliciting buy orders from a total of nine institutional investors and 174 individuals between December 2020 and September 2021, it said.
The Securities and Exchange Surveillance Commission advised the agency to impose an administrative punishment on the brokerage last month following its investigation.
SBI employees told the investors that they could cancel their buy orders if the shares debuted above their IPO prices, according to the commission.
The attempt to push up the share prices was apparently aimed at earning a reputation for underwriting IPOs and increasing the chances of becoming a lead manager for new listings, the commission said.
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