A former division chief at Daiwa Securities SMBC Co. allegedly earned more than 3 million yen in February through insider trading, sources close to the case said Saturday.

The employee, who headed the corporate customers division, allegedly bought shares in Nichimen Infinity Inc., a unit of Nichimen Corp., before the trading house announced in mid-February that the unit would turn into a wholly owned subsidiary, the sources said.

The suspect is believed to have bought several thousand shares in Nichimen Infinity just before the announcement, then to have sold them after the deal was unveiled at a profit of more than 3 million yen, the sources said.

Nichimen Infinity was listed on the first section of the Tokyo Stock Exchange and the Osaka Securities Exchange at the time.

The Securities and Exchange Surveillance Commission, Japan’s securities market watchdog, is investigating the case. It suspects the division chief took advantage of information obtained through work, Daiwa Securities SMBC said.

When the deal was made, the division chief was on loan from Sumitomo Mitsui Banking Corp., which has a 40 percent stake in Daiwa Securities SMBC. Daiwa Securities Group Inc. holds the remaining stake in the firm.

The official was fired in late September after being transferred back to SMBC in mid-September.

Officials at Daiwa Securities SMBC said the company is considering punishing a number of other employees, including executives in charge of legal compliance, who may have been involved in the deal.

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