Police arrested the president of Union Holdings Co. and eight other people Wednesday for allegedly manipulating its stock prices in 2007, police officials said.

The arrest of Union Holdings President Toyoyuki Yokohama, 53, and the eight -- members of a speculative trading group -- followed the search earlier in the day by the Osaka prefectural police and the Securities and Exchange Surveillance Commission of the holding firm's head office and other places.

The police and the securities watchdog suspect Yokohama and the eight speculative traders conspired to place a large volume of buy and sell orders at the same time for shares of the Tokyo-based holding company in April 2007 to make trading in the stock look active, investigative sources said.

Union Holdings' share price hovered around 130 yen per share in early March in 2007 but spurted to nearly 180 yen by the end of April. The price tumbled to the 50 yen level in December 2007.

The police and the securities watchdog suspect the president and the speculators had earned a profit by unloading their holdings of Union Holdings shares after their prices surged, the sources said, adding the transactions would constitute a violation of the Financial Instruments and Exchange Law.

Some of the nine denied the allegation, said the sources.

One of the eight speculative traders was once a major shareholder of a separate company run by Yokohama, they said.

Union Holdings, listed on the Second Section of the Tokyo Stock Exchange, owns Union Optical Co., a precision instruments maker in Tokyo. Union Optical has been in the red in recent years.