Public prosecutors arrested a certified public accountant Tuesday on suspicion of netting some 4.85 million yen via insider trading of Mutoh Industries Ltd. shares, the prosecutors said.
Yozo Kobayashi, 55, is suspected of violating the Securities and Exchange Law by buying shares in the company, which is based in Tokyo's Setagaya Ward and manufactures computer peripheral devices, before it announced a plan to enter into a business alliance with a Tokyo computer software maker.
Kobayashi allegedly had foreknowledge of the alliance and profited by selling the shares after the stock price rose due to the announcement of the tieup.
Between July 21 and 23, 1999, he purchased some 42,000 Mutoh Industries shares for between 216 yen and 220 yen per share, according to the prosecutors. The company announced the tieup plan with Tokyo Computer Service Co. in Tokyo's Chiyoda Ward on July 26 that year.
Before the two firms announced on July 26, 1999, plans to unite their operations Kobayashi had helped the software firm examine the feasibility of the tieup plan, the prosecutors said.
When he allegedly sold the shares, between July 30, 1999, and June 2000, they were worth between 290 yen and 469 yen each, bringing him about 4.85 million yen in profit, they said.
Insider trading can be punished with a maximum of three years imprisonment or a fine of up to 3 million yen under law.