The Japanese unit of France's BNP Paribas is suspected of illegally manipulating the share price of Softbank Corp. to avoid incurring losses, sources said Thursday.
Acting on the latest scandal involving BNP Paribas Securities (Japan) Ltd., the Financial Services Agency is considering slapping a business suspension on the company, among other steps, the sources said.
BNP Paribas Securities allegedly placed massive buy orders for Softbank shares at an unreasonably high price just before the trading close on a certain day to prevent the Internet conglomerate's shares from being traded at a lower price and forcing the company to incur losses, the sources said.
The firm might have intentionally created a situation of this kind so that it would not have to trade Softbank shares at a loss on the day in question, they said.
The Securities and Exchange Surveillance Commission is looking into the matter with an eye to recommending that the FSA impose some administrative punishment on BNP Paribas Securities due to repeated illegal practices, they said.
Last November, the FSA ordered BNP Paribas Securities to improve its business practices due to its failure to disclose crucial information about a convertible bond issue that the firm underwrote for Urban Corp., a property developer that later went bust.
Regulators also punished BNP Paribas Securities with business suspensions for illegal practices in June 2000 and December 2002.