1. As to the first ground for appeal

A. Article 174(1) of the former Financial Investment Services and Capital Markets Act (amended by Act No. 11845, May 28, 2013; hereinafter “Capital Market Act”) provides that “a person who falls under any of the following subparagraphs” shall not use or allow another person to use undisclosed information related to the business, etc. of a listed corporation in trading or any other transaction of specific securities, etc.:

“.......”

In addition, the same clause provides a person who becomes aware of material nonpublic information in relation to his duties, such as officers and employees of the corporation or the corporation, major shareholders, permission-granting authorities, agents, employees, etc., or those who receive information from them.

Here, the term “important information” refers to information that may have a significant impact on investment decisions by investors, such as management, financial status, business performance, etc. of listed corporations.

This refers to information which has an important value in determining whether a reasonable investor will purchase or continue to hold, or will dispose of securities with a significant value in determining whether a reasonable investor will do so, and a changed statement is likely to have a significant impact on the price of securities (see, e.g., Supreme Court Decisions 2016Do10313, Jan. 12, 2017; 2014Do1175, Jan. 25, 2017). (b) On the grounds delineated below, the lower court determined that the net profit at the end of 2010 of E Co., Ltd. (hereinafter referred to as “E”), as well as the information that has a significant decrease in the net profit at the end of 201 and operating profit at the end of 2010, constitutes an important information (hereinafter referred to as “instant information”).

(1) The former Regulations on Publication of Securities and Exchange (amended by Presidential Decree No. 2351, Apr. 2, 2012) provides that the sales amount, business profits, or net profits or losses of the current business year have increased or decreased by at least 30/100 compared to the business year