UPDATE 4-BNP Paribas manipulated stock trade-Japan watchdog

* Wants discipline for stock manipulation, false reports

* Says submitted report with some untruthful descriptions

* Japan unit could face order to suspend operations - media

(Adds comments from SESC official, background, share price)

By Junko Fujita and Mayumi Negishi

TOKYO, Oct 16 (Reuters) -

A BNP Paribas (BNPP.PA) unit submitted a report that contained false information on a controversial financial deal and one of its traders manipulated stock prices, and both should face discipline, Japan's securities watchdog said on Friday.

BNP Paribas Securities (Japan) Limited ran afoul of Japanese regulators last November over a convertible bond deal with property developer Urban Corp, which failed soon after the transaction, and was required to submit reports about the incident.

The Securities and Exchange Surveillance Commission (SESC) said on Friday that BNP Paribas had submitted reports that were incomplete and had put "untruthful descriptions" in them. The SESC said that it did not believe that the company had intended to deceive the regulator.