Photo/Illutration The Tokyo Stock Exchange in Tokyo’s Chuo Ward (Asahi Shimbun file photo)

An employee of the Tokyo Stock Exchange Inc. is under investigation over his suspected involvement in insider trading, sources said.

The Securities and Exchange Surveillance Commission in September searched the home of the employee, who is in his 20s, the sources said.

It is rare for investigators to search the home of an employee of TSE, the company that operates the nation’s largest securities exchange.

The employee belongs to the Listing Department’s Corporate Disclosure Office, which supports listed companies in disclosing information, the sources said.

The SESC, the government’s securities industry watchdog, suspects that the corporate information he gleaned through his work was used in illicit stock transactions, the sources said.

In engaging in insider trading, those who conducted illicit stock transactions and those who provided unpublished important corporate information are both punished under the revised Financial Instruments and Exchange Law, which took effect in 2014.

Violators face imprisonment of up to five years, a fine of not more than 5 million yen ($33,000) or both.

The law also prohibits those who obtained unpublished important corporate information from recommending illicit stock transactions.

However, those who conducted illicit stock transactions are not subject to punishment if they received only recommendations and not relevant information.

In a statement issued Oct. 23, Japan Exchange Group Inc., the parent company of TSE, confirmed that a TSE employee is currently under investigation by the SESC.

“The JPX Group will continue to make every effort in cooperating with this investigation,” the company said. “We would like to offer our sincerest apologies for the inconvenience and concerns this will cause our listed companies and other related parties.”

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