2017Mo1098(combined) Violation of the Financial Investment Services and Capital Markets Act, Violation of the Commercial Act

Attorney EK

[2016 Highest 6414]

A person who holds stocks, etc. of a stock-listed corporation (referring to cases where the total number of stocks, etc. held by the person himself/herself and his/her specially related persons is 5/100 or more of the total number of such stocks, etc.) shall report to the Financial Services Commission and an exchange within five days from such date, as prescribed by Presidential Decree, and where the total number of such stocks, etc. is changed by at least 1/100 of the total number of such stocks, etc. (excluding cases where the number of such stocks, etc. is not changed, or cases prescribed by Presidential Decree, such changes shall be reported to the Financial Services Commission and an exchange within five days from such changes, and no person shall make a false statement or representation of important matters prescribed by Presidential Decree, such as the type and number of the stocks held or changed, the date of acquisition or disposal, etc., or make a statement or

On January 5, 2012, the Defendant entered into a share acquisition agreement with EM and its related parties, EN Co., Ltd., EM, and EL stocks owned by EO, 854,872 (20% of total issued stocks), and sold 1,50,664 shares (3.05%) out of the above shares to EE on the same day, but did not report the status of holding, purpose of holding, major terms and conditions of holding, and contents of change thereof within five days from that day.

In addition, from January 12, 2012 to March 16, 2012, the Defendant did not report the status of the EL shares and the purpose of holding, etc. four times in total, as shown in the attached list of crimes, and did not report the changes to the Financial Services Commission and the Exchange even though the total number of the shares, etc. was changed by at least 1/10 of the total number of the shares, etc., or made a false statement or indication as to the important matters prescribed by Presidential Decree.

"2017 Highest 1098"

On June 23, 2011, the Defendant was sentenced to two years of imprisonment with prison labor and three years of suspended execution in the Incheon District Court on the grounds of occupational embezzlement, etc., and the judgment was finalized on August 30, 2011.

1. Violation of the Commercial Act;

On March 2010, the Defendant purchased YP preemptive rights (e.g., 3,324,428 shares) from EP, which is a hedge fund in Germany, and, during the process of exercising the preemptive rights, 2 billion won as the exercising price of the preemptive rights is insufficient, the Defendant was willing to arrange for the payment of shares by withdrawing funds from the bond company to the bond company immediately after depositing them into the account in the name of Y in the form of the exercise price of the preemptive rights, and paying them to the bond company.

On March 4, 2010, the Defendant, while exercising preemptive rights to the shares of the KY General Co., Ltd. 3,324,428, the Defendant deposited KRW 2,00,000,000 out of the exercise price of KRW 2,014,603,368, and deposited it into the Suguin account (Account Number) borrowed from E Q from the bond company E Q, and issued a certificate of deposit of bond with warrant from the Sugum branch on March 24, 2010 and returned it to the bond company E and returned it to the bond company E on March 24, 2010, and acquired KRW 3,324,428, thereby pretending to pay KRW 2,00,000,000 from the KY's share capital to the bond company.

2. Violation of the Financial Investment Services and Capital Markets Act;

No one shall disseminate a rumor or use a deceptive scheme with an intention to trade or make any other transaction in financial investment instruments or attempt to cause a fluctuation in the market price.

On March 12, 2010, the Defendant distributed false report materials related to the Dispute Resolution Co., Ltd. to the effect that he artificially supported the Dispute Resolution Co., Ltd., and sold high-priced new stocks acquired as described in paragraph (1), and then sold them to raise investment funds to Y. In March 12, 2010, the Defendant issued a report to the same effect that “ES, a subsidiary company of the Dispute Resolution Co., Ltd., completed the development of the AB Resolution Co., Ltd., in the Dispute Resolution Co., Ltd. Office,” and distributed the report materials to ET and other media companies.

On March 18, 2010, the Defendant continued to distribute news materials to the media companies, such as ET, to report the same purport.

However, at the time of distribution of each news report data, the dispute resolution committee failed to complete the project for improvement of the AB and the development of the ABS system, and it was difficult to complete the development within a short period. Nevertheless, the Defendant developed the ABS system and the ABS system, which is a subsidiary company of the ABS, and distributed false news report data as soon as commercialization would improve the management status of the Y, thereby artificially raising the ABS's share price from KRW 1,515 to KRW 1,800 by artificially raising or preventing decline.

Summary of Evidence

"2016 Highest 6414"

1. Defendant's legal statement;

1. A protocol concerning the examination of suspects of EM by each prosecution;

1. A copy of the prosecution statement concerning the EU;

1. A EV statement;

1. Each written confirmation of EW and X;

1. Written answers of EM, DE, EY, EZ, FA, and FB;

1. (States) Trade data related to EN-related trade data and EO-related trade data;

1. A written contract for acquisition of stocks, and a report on the status of stocks held in bulk;

"2017 Highest 1098"

1. Defendant's legal statement;

1. Statement made by each prosecutor on the FC, FD, and FE;

1. Documents from each e-mail (F) output;

1. Ten copies of printed matters of newspaper articles;

1. (Week-Related Newspaper Data 12 copies;

1. One copy of output of details of stock trade;

1. Arrangement of details of each track of funds;

1. Market price trends and details of stock sales before and after the false public announcement;

1. 37 copies of accounting records, including the president of theY account (investigative records, between 2531 and 2567-1);

1. Previous convictions: Investigative report (before a final and conclusive judgment of stay of execution of a suspect), in Incheon District Court Decision 1429 High Court Decision, in Incheon District Court Decision 201No241 decided by the Incheon District Court;

Application of Statutes

1. Article relevant to the facts constituting an offense and the selection of punishment;

Articles 628(1) and 622(1) of the Commercial Act; Articles 443(1)8 and 9, and 178(1)1 and 178(2) of the former Financial Investment Services and Capital Markets Act (Amended by Act No. 11845, May 28, 2013); Articles 444 subparag. 18, 445 subparag. 20, 147(1), (3), and (4) (election of imprisonment) of the Financial Investment Services and Capital Markets Act

1. Handling concurrent crimes;

The crime of the 2017 Highest 1098 case: the latter part of Article 37 and the main sentence of Article 39(1) of the Criminal Act

1. Aggravation for concurrent crimes;

Articles 37 (former part), 38 (1) 2, and 50 of the Criminal Act

Reasons for sentencing

Although the defendant had been sentenced several times of punishment, each of the crimes in this case is not good enough to be committed. However, the punishment should be determined by comprehensively taking into account the following factors: (a) the confession and reflect of the defendant; (b) the punishment should be imposed simultaneously with the crime sentenced to one year and six months of imprisonment on February 7, 2017 and the crime sentenced to eight years of imprisonment; and (c) the punishment should be imposed by comprehensively taking into account the age, character and conduct, environment, etc. of the defendant

It is so decided as per Disposition for the above reasons.