In the absence of an agreement on the discretionary sale and purchase transactions, the violation of Article 107 (1) of the Securities and Exchange Act (negative)

In order to constitute a violation of Article 107 (1) of the Securities and Exchange Act, it shall be premised on the existence of an agreement between the customer and the securities company for the discretionary sale and purchase transaction. Therefore, in case where an employee of the securities company arbitrarily trades shares of the customer without the agreement for discretionary sale and purchase transaction, he cannot be held liable

Article 107 of the Securities and Exchange Act

Defendant corporation

Prosecutor

Seoul Southern District Court Decision 90Na4490 delivered on June 18, 1992

The prosecutor's appeal is dismissed.

The summary of the grounds for appeal by the prosecutor is that the term "in case where a member is entrusted with the sale and purchase transaction of securities by his customer" in the main sentence of Article 107 (1) of the Securities and Exchange Act means that a contract which is entered into immediately, and therefore, in order to punish a violation of the above provision of the Act, it does not necessarily require any separate contract for the sale and purchase transaction in addition to the above contract for the sale and purchase transaction, and such interpretation is in conflict with the purport of the above Act in order to prevent any loss to the customer due to any voluntary transaction by a securities company, and ultimately, it must be punished for the violation of the above provision of the Act as to the act of the non-indicted 1's voluntary transaction in this case, the court below erred in the misapprehension of legal principles as to the above Act

Therefore, in full view of the evidence presented by the court below, it is recognized that the non-indicted 1, on August 4, 1988, entered into a securities transaction agreement with the defendant company in the name of the non-indicted 1's husband, which was the non-indicted 1's husband, and from that point of time, entered into a securities transaction agreement with the defendant company under its own independent judgment and decision. However, on December 8, 1989, the non-indicted 1, an agent of the defendant company's business division, who was informed of the defendant company's business office from the defendant company's guest's place of business, arbitrarily traded securities 17 times in total on the account of the above Kim Jong-man's account

Article 107 (1) of the Securities and Exchange Act (Act No. 3945, Nov. 28, 1987) prior to the amendment of the applicable provisions of the facts charged in this case provides that "where a member is entrusted with the sale and purchase transaction of securities by a customer, he/she may make a decision under the authority of the customer only on the quantity, price, and time of sale and purchase. In this case, the type, item, and classification and method of the transaction of securities shall be decided by the customer." Article 208 (3) of the same Act provides that where a violation of the above provisions is committed, a punishment provision shall be provided, and Article 215 (2) of the same Act provides that not only the employees of the securities company that violated the above provisions but also the corporation shall be punished. In this case, it is problematic whether the above non-indicted's act violates the provisions of Article 107 (1) of the Securities and Exchange Act, such as the prosecutor's appeal.

Therefore, in light of the above legal principles, it is unreasonable to interpret that the above provision of the Securities and Exchange Act provides that if an employee's act of purchasing and selling securities is more likely to be subject to punishment than the above provision of the Securities and Exchange Act, it shall be interpreted that the above provision of the Securities and Exchange Act is excessively expanded even if it is interpreted as the same as the opening agreement of the securities company. In light of the purport of the above provision, in order to protect the customers, it shall be decided all elements necessary for the transaction and shall be followed accordingly. On the other hand, in the case of securities investment, it shall require prompt trading according to investment information, experience, and information collection ability of ordinary investors, and if the above provision of the Securities and Exchange provides that an employee's act of purchasing and selling securities is more likely to be subject to punishment than the above provision of the Securities and Exchange Act, it shall be interpreted that the above provision of the Securities and Exchange Act is more likely to violate the above provision of the Securities and Exchange Act, and thus, it shall be interpreted that the above provision of the Securities and Exchange Act provides that an employee's act of sale and purchase should be regulated.

Therefore, the facts charged of this case on the premise that there was an agreement between the above non-indicted and Kim Jong-young on the sale of goods constitutes a case where there is no proof of crime. Accordingly, the judgment of the court below which acquitted the defendant on the ground that the facts charged of this case constitute a case where the facts charged of this case does not constitute a crime, but there is a little error in its reasoning, but there is no reason to

Therefore, the prosecutor's appeal is dismissed in accordance with Article 364 (5) of the Criminal Procedure Act. It is so decided as per Disposition.

Judges Gangnam-gu (Presiding Judge)