Japan Day Trader Arrested on Market Manipulation Charges: Report

Toru Yamada, a Japanese retail investor who was among the most vocal trading voices on the country’s social media, was arrested in Osaka on charges of market manipulation, according to local media reports.

Yamada, better known by his Twitter account name @Tonpin1234, was arrested on Monday local time by the Osaka District Public Prosecutors Office along with another man, Hironobu Utsunomiya, for allegedly breaching the Financial Instruments and Exchange Act, the Nikkei newspaper reported.

The charges related to trades involving Jasdaq-listed company Nichidai Corp. in 2018, the report said. The two placed a large number of sell orders below the market price just before the close, seeking to artificially stabilize Nichidai’s share price with the intention of preventing it from being subject to restrictions on new margin trades, according to the reports. Shares in Nichidai had surged since the start of that year, rising more than threefold by the time of Yamada’s last filing on March 26.

On Twitter, where he was a regular presence until last June, Yamada frequently tweeted about his favored stocks, and his bets were often followed by smaller retail investors. A combative presence on social media, Yamada frequently argued with other users who accused him of manipulation.

Phone calls to Yamada’s listed number were not answered, nor were direct messages to his Twitter account. He last tweeted on June 25, saying he was taking a break from Twitter after his account had been briefly locked.

Osaka prosecutors declined to comment when contacted by Bloomberg News.

Yamada first reported a 5.75% stake in Nichidai on Feb. 13, 2018, according to regulatory filings at the time. Over the course of the next six weeks, he repeatedly raised and lowered his stake in the company, filing five more regulatory filings, which are required when a stake either changes by one percentage point or more, or passes the 5% boundary. He also tweeted about the stock more than 20 times over the course of the same period.

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