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Ordinary shares of Trend Micro (TMIC) (Tokyo: 4704) lost 3.57% on Thursday after trading down by as much as 6.89%. Selling on heavy volume comes on the news its CEO Eva Chen may have violated SEC stock ownership reporting rules and her husband's alleged illegal involvement in trading shares of Sina Corp (SINA), where he was former co-chairman. Trend Micro has publicly stated it "isn't aware of any allegations against Ms. Chen that would be attributable to the company."

JP Morgan (JPM) issued a note during the afternoon session in Tokyo amidst the selling, speculating that even in the case of a dismissal of Chen that there shouldn't be any problems replacing her internally and that the damage should be limited.

Trend Micro's ordinary shares closed at 3,780 yen ($32.82). Its ADRs closed yesterday at $33.70. Trading volume is generally light on its ADRs but based on what Trend itself is saying and what JPM said, Trend could make for a profitable short-term trade if it is oversold.

Trend Micro (TMIC) 1-year chart:

Source: Trend Micro Trades Lower on SEC Allegations Against CEO (TMIC)