TOKYO, Aug 1 (Reuters) - A Singapore-based hedge fund manipulated prices in the Japanese equity market and should pay a 431 million yen ($4.38 million) fine, Japan’s securities regulator said, which would be biggest ever imposed against a non-Japanese firm for market manipulation.
The Securities and Exchange Surveillance Commission (SESC) said on Wednesday that Juggernaut Capital Management inflated the share price of real estate developer Rise Inc for 26 business days during March and April last year.
Efforts to contact Juggernaut founder Yashwant Bajaj in Singapore were unsuccessful.
The SESC said it will seek approval from the Financial Services Agency to fine Juggernaut 431 million yen ($4.38 million). The FSA typically approves requests from the regulator to impose fines.
SESC said Juggernaut had placed large buy orders or traded heavily right before the close of the market sessions during the 2012 period through a fund in the Cayman Islands, which gave the impression to participants that Rise shares had strong demand.
The regulator estimated Juggernaut made about 200 million yen through illegal trading activities.
Juggernaut would be the third non-Japanese company fined by the SESC for manipulation or insider trading.
The regulator announced a 14.68 million yen fine for U.S.-based First New York Securities in June 2012 for insider trading and in December a 67.71 million yen penalty for hedge fund firm Tiger Asia Partners, also based in the U.S., for market manipulation.
Bajaj, at one time a Lehman Brothers’ managing director, launched Juggernaut in August 2011. Between January and April last year the hedge fund gained 58.6 percent, according to fund performance data seen by Reuters. The firm stopped reporting fund performance after April 2012. ($1 = 98.3550 Japanese yen) (Reporting by Noriyuki Hirata and Chikafumi Hodo, Rachel Armstrong in SINGAPORE and Nishant Kumar in HONG KONG; Editing by Richard Borsuk)