1. As to the Prosecutor’s Grounds of Appeal

A. Based on its stated reasoning, the lower court acquitted Defendant 1 on the ground that there was no proof of each crime as to the violation of the Financial Investment Services and Capital Markets Act (hereinafter “Capital Markets Act”) due to some unfair trading among the facts charged against Defendant 1 and Defendant 2, and the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (hereinafter “Aggravated Punishment of Specific Economic Crimes”) (Fraud), and the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (hereinafter “Aggravated Punishment of Specific Economic Crimes”), among the facts charged against the remaining Defendants except Defendant 1, Defendant 2, and Defendant 18, the violation of the Capital Markets Act, the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud), and the Door-to-Door Sales, etc. against Defendant

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine on deception, joint principal offender, and additional collection under the Act on Special Cases Concerning the Confiscation and Restoration of Corruption Property, as otherwise alleged in the grounds of appeal, inasmuch as the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by exceeding the bounds of the principle of free evaluation of evidence, or by using documents, etc. containing false description or indication as to material facts, or in relation to the trading and other transactions of financial investment instruments prohibited by Article 178(1)2 of the Capital Markets Act.

B. The assertion that a failure to impose a discretionary fine concurrently constitutes abuse of discretionary authority constitutes an allegation of unfair sentencing. However, as to the interpretation of Article 383 Subparag. 4 of the Criminal Procedure Act, a prosecutor may not claim the grounds for appeal that the determination of the court below's punishment is less and less, or that there was an error in violation of the rules of evidence in the court below's finding of facts premised on the sentencing contrary to the defendant's interests (see, e.g., Supreme Court Decisions 94Do1705, Aug. 12, 1994; 2001Do5304, Dec. 27, 2001).

C. The prosecutor appealed the entire acquitted portion of the judgment of the court below, but the court below acquitted Defendant 1 on the grounds of its reasoning. ① The violation of the Capital Markets Act due to sale of certain unreported securities among the facts charged against Defendant 1, and ② The grounds for appeal as to the violation of the Door-to-Door Sales Act among the facts charged against the remaining Defendants except Defendant 7 and Defendant 18 are not indicated.

2. As to Defendant 1’s ground of appeal

A. Of the facts charged against Defendant 1, the lower court determined that Defendant 18’s shares of Defendant 18, who sold to the victims prior to the issuance of uniform stock certificates, constitute financial investment instruments, based on the following circumstances: (a) on the grounds that Defendant 18 entered into a transfer agency contract with the Nonindicted Bank and issued a uniform stock certificate; and (b) issued the same quantity of uniform stock certificates to the purchaser when Defendant 1 sold the previous shares of Defendant 18, etc.; and (c) on the other hand, Defendant 18’s shares, which were sold by the Defendant to the victims, constitute financial investment instruments.

Examining the relevant legal principles and evidence duly admitted, the lower court did not err by misapprehending the legal doctrine on the meaning of financial investment instruments as stipulated in Article 3(1) of the Capital Markets Act. In addition, contrary to what is alleged in the grounds of appeal, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the meaning of “an act of seeking money or other economic benefits by using a document, etc. containing false description or representation as to material matters,” or by misapprehending the legal doctrine on the meaning of “profit derived from a violation” as stipulated in Article 443(1) of the Capital Markets Act, contrary to what is alleged in the grounds of appeal.

B. As to Defendant 1’s violation of the Door-to-Door Sales Act with regard to Defendant 1’s sales of stocks, the lower court determined that: (a) the payment of bonuses under the pretext of introduction to the existing salespersons who introduced them whenever a new salesperson is formed; and (b) the payment of bonuses under the pretext of incentives for all subordinate salespersons under his/her command should be made if a certain salesperson is promoted to a certain rank or higher; and (c) the payment of bonuses under the premise that all subordinate salespersons were introduced from the time of initial subscription to the sales; (b) the sales organization was formed under the premise that all subordinate salespersons were naturally and naturally different sales organizations; (c) bonuses under the pretext of incentives for promotion that are paid to the position of the vice president should be paid to all the subordinate salespersons under the premise that all the subordinate salespersons are linked to the sales organization’s sales incentive under the Act, as if the pertinent sales incentive were newly established; and (d) the payment of bonuses under the premise that all the subordinate salespersonss were made under the condition that all other subordinate salespersons’s sales incentives were subsequently established.

Examining the relevant legal principles and evidence duly admitted, the lower court did not err by misapprehending the legal doctrine on the meaning of “multi-level marketing” under Article 2 subparag. 5 of the Door-to-Door Sales Act, contrary to what is alleged in the grounds of appeal.

C. On the grounds stated in its reasoning, the lower court convicted Defendant 1 of the violation of the Specific Economic Crimes Act (Fraud) and the violation of the Capital Markets Act (excluding the part of innocence) due to sales of unreported securities. Examining the reasoning of the lower judgment in light of the relevant legal principles and evidence duly admitted, the lower court did not err by misapprehending the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the relation between the violation of the Capital Markets Act due to deception, causation, deceptive amount, and unfair trading in the crime of violating the Specific Economic Crimes Act (Fraud), the relation between the violation of the Capital Markets Act due to unfair trading, and the number of the crimes of violating the Act

D. Examining various circumstances, including Defendant 1’s age, sex, and environment, relationship with the victim, motive, means, and consequence of each of the instant crimes, and the circumstances after the commission of the crime, etc., the lower court’s sentence of imprisonment with prison labor for not less than 15 years and fine not exceeding 500 million won is extremely unfair, even if considering the circumstances asserted in the grounds of appeal.

3. As to Defendant 2’s ground of appeal

Based on its stated reasoning, the lower court convicted Defendant 2 of violation of the Capital Markets Act, violation of the Act on the Aggravated Punishment of Specific Economic Crimes (Fraud), and door-to-door Sales Act (excluding the part not guilty in the grounds of appeal). Examining the reasoning of the lower judgment in light of relevant legal principles and evidence duly admitted, the lower court did not err by misapprehending the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the violation of the Capital Markets Act and the joint principal offender of the violation of the Act on the Aggravated Punishment of Specific Economic Crimes (Fraud), and the meaning

4. As to the grounds of appeal by Defendants 3, 8, 10, 9, 11, 13, and 16

A. Violation of the Door-to-Door Sales Act

Based on its stated reasoning, the lower court convicted the Defendants of violating the Door-to-Door Sales Act (excluding the part not guilty in the reasoning) among the facts charged against the said Defendants. Examining the reasoning of the lower judgment in light of relevant legal principles and evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the meaning of “multi-level marketing” under Article 2 subparag. 5 of the Door-to-Door Sales Act, establishment

B. The remaining grounds of appeal by Defendant 9

The argument that the judgment below erred in the misapprehension of legal principles as to the establishment of joint principal offense in violation of the Door-to-Door Sales Act is not a legitimate ground for appeal since Defendant 9's ground for appeal is asserted in the final appeal that the court below did not consider it as a subject of judgment ex officio.

C. The remaining grounds of appeal by Defendant 11

According to Article 383 subparag. 4 of the Criminal Procedure Act, only in cases where death penalty, life imprisonment, or imprisonment or imprisonment without prison labor for not less than ten years has been imposed, an appeal on the grounds of unfair sentencing shall be allowed. In this case where Defendant 11 was sentenced to a minor sentence, the argument that the punishment is too unreasonable is not a legitimate ground for appeal.

5. As to Defendant 18’s ground of appeal

Based on its stated reasoning, the lower court convicted Defendant 18 of violation of the Capital Markets Act and door-to-door sales Act among the facts charged against Defendant 18. Examining the reasoning of the lower judgment in light of relevant legal principles and evidence duly admitted, the lower court did not err by misapprehending the legal doctrine on the establishment of the crime of violation of the Capital Markets Act by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the meaning of financial investment instruments under Article 3(1) of the Capital Markets Act, by using documents, etc. containing false description or indication as to material facts, and other transactions in relation to trading and other transactions of financial investment instruments prohibited by Article 178(1)2 of the Capital Markets Act.

6. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Noh Tae-tae (Presiding Justice)