Photo/Illutration The building that houses the Securities and Exchange Surveillance Commission and the Financial Services Agency (Asahi Shimbun file photo)

The Securities and Exchange Surveillance Commission filed a criminal complaint against a former judge on loan to the Financial Services Agency on suspicion of insider trading.

The SESC said Dec. 23 it also sought charges against a former employee of Tokyo Stock Exchange Inc. and his father over a separate case of suspected insider trading.

The complaints were filed with the Tokyo District Public Prosecutors Office’s Special Investigation Department on the same day.

According to the commission and other sources, Soichiro Sato was loaned to the FSA in April and assigned to the Corporate Accounting and Disclosure Division.

He is suspected of buying 11,800 shares in 10 companies for about 9.5 million yen ($61,000) before information on tender offers he obtained through the job became public.

He is believed to have earned several million yen by selling the shares after their prices rose following the announcements of the tender offers, sources said.

Sato, 32, admitted to the allegations in an SESC investigation.

The FSA dismissed him on Dec. 23.

In a statement, Osamu Tokuoka, director-general of the Supreme Court’s Personnel Affairs Bureau, said it is “extremely regrettable” that someone who was a judge faced a criminal accusation while on loan to the FSA and was given a disciplinary dismissal.

“We must have never allowed this to happen, and we will enforce stricter discipline,” he said.

Keito Hosomichi, who belonged to the Corporate Disclosure Office within the TSE’s Listing Department, is suspected of passing information on tender offers he obtained through the job to his father, Masato, before it became public.

Masato, 58, is suspected of buying 15,200 shares in three companies for about 17 million yen between late January and early April based on the information he received from Keito, 26.

He apparently made several million yen in profits, sources said.

Trading in securities based on yet-to-be released corporate information and providing such information to a third party are both punishable under the Financial Instruments and Exchange Law.

Violators face imprisonment of up to five years, a maximum fine of 5 million yen, or both.

The government may mete out surcharges or other forms of administrative punishment.

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