[1] Criteria for determining whether false information under Article 188-4 (4) of the former Securities and Exchange Act has been disseminated or falsely indicated

[2] The case holding that an amendment of the articles of incorporation adding the company's business purpose to the resolution of the general meeting of shareholders cannot be deemed as publicly announcing the fact or spreading false facts or making a false representation

[3] The purpose of Article 188-4 (4) of the former Securities and Exchange Act and the criteria for its determination

[4] The meaning of "profit derived from a violation of the proviso of Article 207-2 of the former Securities and Exchange Act" and whether the capital gains tax in this case is included in the transaction cost subject to deduction (negative)

[5] The meaning of the "person who received the relevant information (person who received the information in question)" which is subject to the prohibition of using undisclosed information under Article 188-2 of the former Securities and Exchange Act

[1] Whether false information or false information has been spread should be determined by whether the content of disclosure itself is false or not, and it should not be determined by whether the content of disclosure actually has the intent and ability to realize the content of disclosure.

[2] The case holding that an amendment of the articles of incorporation adding the company's business purpose to the resolution of the general meeting of shareholders shall not be deemed as publicly announcing the fact or spreading false facts or making a false representation

[3] The prohibition of fraudulent unfair trading under Article 188-4 (4) of the former Securities and Exchange Act is aimed at protecting individual investors' interests in securities trading and protecting investors' trust in the general securities market, thereby contributing to the development of the national economy. Thus, whether it is an act related to securities trading, etc., or whether it is false or not it is intended to acquire unfair profits or economic profits, etc., shall be determined based on objective criteria, comprehensively taking into account the status of the offender, the status of the issuing company, the management status of the issuing company, the situation of the share price, and all the circumstances before and after such an act, etc. In light of the purpose of the Securities and Exchange Act and the legislative intent of the above provision, the unfair profits under the above provision shall not be limited to the individual and tangible economic interests of the offender due to the disposition of securities, but shall include not only the acquisition of management rights, the securing of control rights, the increase of status within the company, but also the passive and active profits such as the avoidance of losses, but also the comprehensive profits that are not yet passive and future profits.

[4] The term "profit accrued from a violation of the proviso of Article 207-2 of the former Securities and Exchange Act" is a concept contrary to the "amount of loss," which is stipulated at the same time, and the profit accrued from the violation, i.e., the gross amount of the profit accrued from the violation, i., the gross amount of the profit accrued from the violation, i.e., the total amount of the profit accrued from the transaction. Therefore, the profit accrued from the actual transaction refers to the net trading profit remaining after deducting trading expenses, such as purchase fees, sales fees, and securities transaction tax (including special tax for rural development in the case of Stock Exchange) from the gross amount of the securities transaction related

[5] The term "person who received the pertinent information (person who received the corresponding information)" refers to the person who falls under any of the subparagraphs of Article 188-2 of the former Securities and Exchange Act and has received the pertinent information from the person falling under any of the subparagraphs of paragraph (1) of the same Article.

[1] Article 188-4 (4) of the former Securities and Exchange Act (amended by Act No. 6423 of March 28, 2001) / [2] Articles 186 (1) 4 and 188-4 (4) of the former Securities and Exchange Act (amended by Act No. 6423 of March 28, 2001) / [3] Article 188-4 (4) of the former Securities and Exchange Act (amended by Act No. 6423 of March 28, 2001) / [4] Article 207-2 of the former Securities and Exchange Act (amended by Act No. 6423 of March 28, 2001) / [5] Article 188-2 (1) of the former Securities and Exchange Act (amended by Act No. 6423 of March 28, 201)

[3] Supreme Court Decision 2000Do444 Decided January 19, 2001 (Gong2001Sang, 578), Supreme Court Decision 2002Do1696 Decided July 22, 2002 (Gong2002Ha, 2100), Supreme Court Decision 2002Do6053 Decided January 10, 2003 / [4] Supreme Court Decision 2002Do1256 Decided June 14, 2002 (Gong2002Ha, 1741), Supreme Court Decision 2002Do1855 Decided July 26, 2002 (Gong202Ha, 2159)

Defendant 1 and one other

Defendants and Prosecutor

Attorney Gyeong-do et al.

Seoul District Court Decision 2002No5173 Delivered on January 22, 2003

The conviction part against Defendant 1 among the judgment below is reversed, and that part of the case is remanded to the Seoul District Court Panel Division. Defendant 2 and the Prosecutor’s appeal are all dismissed.

1. As to Defendant 1’s ground of appeal

A. According to the reasoning of the judgment below, the court below found the defendant, among the facts charged in this case, to be guilty on July 19, 200, of adding "related business objectives, etc. to the above company's business purposes" as a resolution of the board of directors on July 19, 200, by referring to a temporary general meeting of shareholders to the purport that the defendant would add "related business objectives, etc. to the above company's business purposes" to the above company's general meeting of shareholders, and by using a high interest of the general investors in the shares of the company related to information and communication, and by disposing of the shares acquired after the rapid increase in the share price through a false public announcement of the relevant defense materials as if the continuous investment was made in order to develop the above company to the information and communication industry and the Internet-related business entities; and by making the above company go through a false public announcement of the relevant defense materials as if it were to be made; and by inducing the investment to go through a new computer network of shareholders or by inducing the investment of the article in this case to go on August 28, 19.

However, we cannot accept the above judgment of the court below in the following respects.

Of the facts charged, the content that the defendant published or inserted the contents of the above indictment (hereinafter referred to as "the contents of the publication") refers to a provisional general meeting of shareholders to add the business contents of "information and communication-related business" to the company's business purpose by the resolution of the board of directors on July 19, 200, and the above agenda was determined by the resolution of the general meeting of shareholders on August 18 of the same year." The court below determined that the defendant published and published the contents of the publication to sell the high price of the shares of the emulation sing steel industry where the price drop without such intention as well as the ability to promote the business in the field related to information and communication through the emulation and railway industry, and thus, it was determined that there was no such intention, thereby

However, the issue of whether the defendant spreads false facts or makes a false representation shall be determined by whether the content of the publication itself is false or not, and it shall not be determined by whether the defendant actually has an intent or ability to make an investment in the business related to information and communications. According to the records, since it can be known that he added the business "information and communications-related business" to the company's business purpose through the resolution of the general meeting of shareholders, such as the contents of the publication, the content of the publication itself shall not be deemed to be false. Meanwhile, according to Article 186 (1) 4 of the former Securities and Exchange Act (amended by Act No. 6423, Mar. 28, 2001; hereinafter "the former Securities and Exchange Act"), the fact shall be announced to the public. Thus, even if the defendant did not carry out the business related to information and communications from the beginning, even if he did not have an intent or ability to make an investment in the business related to information and communications, it shall not be deemed that he published the above fact or made a false representation or false representation.

Nevertheless, the court below found the defendant guilty of the facts charged on the ground that the defendant did not have an intent to make an investment in an information and communications-related business or did not actually carry out an information and communications-related business, etc., and found the defendant guilty of the facts charged constitutes an unlawful act that affected the conclusion of the judgment by misunderstanding facts against the rules of evidence or misunderstanding the legal principles on the Securities and Exchange Act. Thus, the ground of appeal pointing this out has merit

B. Facts falling under any of the subparagraphs of Article 186 (1) of the Act are, in principle, "material facts" under Article 188-4 (4) 2 of the Act in light of its purport. Article 186 (1) 13 of the Act provides that "when the facts which fall under any of the subparagraphs of Article 186 (1) of the Act have significant influence on the management, assets, etc. of the corporation and are prescribed by Presidential Decree". Article 83 (3) 1 of the Enforcement Decree of the Act provides that "when there are significant changes in major shareholders or affiliated companies" as one of the facts prescribed by the Presidential Decree. Article 83 (7) 7 of the Act provides that "when there are significant changes in the majority shareholders or affiliated companies", and Article 69 (1) 2 of the Enforcement Decree of the Act provides that "when there are significant changes in the management of the corporation's business environment or significant changes in the majority shareholder's business management, it shall not be deemed that there are significant errors in the judgment of the court below as to the majority shareholder."

C. Article 18-4(4)1 of the Act prohibits intentionally from spreading false prices or false facts, or using deceptive schemes, or intentionally in order to gain unjust profits in connection with the sale and purchase or other trading of securities. Article 188-4(4)2 of the Act prohibits an act of inducing misunderstanding of other persons by using documents containing false information on important matters concerning the sale and purchase or other trading of securities. Such prohibition of fraudulent unfair trading is likely to affect multiple persons, and it can affect the entire securities market, thereby protecting individual investors' interests in the securities market as well as protecting investors' trust in the securities market, thereby contributing to the development of the national economy. It is reasonable to determine whether the securities market is an act related to the sale and purchase of securities, etc., or whether it is an act related to the sale and purchase or other trading of securities, or whether it obtains unjust profits or economic profits, or not, within the scope of 200 years prior to and after the issuance of trading or other trading of securities. It is also reasonable that the aforementioned Supreme Court Decisions 200Da401420, supra, supra.

According to the records, the defendant was planning to sell shares acquired under another person's name to use the funds borrowed from the initial time when acquiring the shares of this case from the time of acquiring the shares, and the defendant actually acquired shares in another person's name on August 22, 200 and August 23, 200, 1,068,000 won per share, and 3,92,000 won per share, and 4,000 won per share, which would have a negative impact on the share price if the largest shareholder sells shares, and thus, the defendant could have been aware that the defendant would have acquired shares from another person's acquisition of the shares in this case's report by stating that he purchased shares in this case was held by another person, and that the defendant would have been able to acquire shares in this case's new financial structure by misunderstanding the legal principles as to the acquisition and transfer of shares, or that the defendant would have acquired shares in this case's new financial structure with the intention of acquiring shares in this case's new financial structure without the intention of acquiring shares.

D. The term "profit accrued from a violation of the proviso of Article 207-2 of the Securities and Exchange Act" is a concept opposite to the "amount of loss," which is stipulated at the same time, and the profit accrued from the violation in question refers to the profit accrued from the violation in question, i.e., the total amount of the profit accrued from the transaction, i.e., the total amount of the profit accrued from the actual transaction. Therefore, the profit accrued from the actual transaction refers to the net trading profit remaining after deducting trading expenses, such as purchase commission, sale commission, and securities transaction tax (including special tax for rural development, in the case of the Stock Exchange) from the total sales amount of the securities transaction related to the actual transaction, in addition to the total purchase amount (see, e.g., Supreme Court Decisions 2002Do1256, Jun. 14, 2002; 200Do1855, Jul. 26, 2002).

In this regard, the judgment of the court below is just and acceptable to consider that the profit gained by Defendant 1 from the violation of the judgment of the court below is KRW 2,980,062,010, and there is no error of law by misunderstanding the legal principles as to the "profit gained from the violation" under the proviso of Article 207-2 of the Act or failing to exhaust all necessary deliberations, as alleged in the ground of appeal.

2. As to Defendant 2’s ground of appeal

In a case where the defendant only declared unfair sentencing as a ground for appeal against the judgment of the court of first instance, it cannot be deemed as the ground for appeal against the judgment of the court below which partially accepted it (see Supreme Court Decision 94Do2134, Feb. 3, 1995). In light of the relevant statutes and the adopted evidence of the judgment of the court of first instance cited by the court below, the court below's concurrent imposition of fines as stated in the above judgment is just and acceptable, and there are no errors in the misapprehension of legal principles as to the concurrent imposition of fines, as alleged in the ground for appeal.

3. As to the Prosecutor’s Grounds of Appeal

According to the records, the other party to the contract with Defendant 1 and the other party to the contract entered into the contract for purchase and sale of 2.9 million shares of this case and the acquisition of the company are about 40% shares of the board of directors, Co., Ltd., Ltd. (R&A). No material can be found to deem that the board of directors and the board of directors of the board of directors of the board of directors of the board of directors of the board of directors were actually the same company or that the board of directors of the board of directors of the board of directors of the board of directors of the board of directors of the board of directors of the board of directors. The "person who received the pertinent information" is not a person who received the pertinent information from the person falling under any of the subparagraphs of Article 188-2 of the Securities and Exchange Act and received the pertinent information from the person falling under any of the above subparagraphs of Article 18-2 of the Act in relation to the above transfer of the board of directors' shares of this case, and it is not a person who received the pertinent information from the other party to the contract.

4. Conclusion

Therefore, among the judgment of the court below, the guilty part against Defendant 1 is in the relation of a blanket crime with the part on which the above defendant's appeal is well-grounded, and such part of the case is reversed in its entirety, and remanded to the court below for a new trial and determination. The appeal by Defendant 2 and the prosecutor is all dismissed. It is so decided as per Disposition by the assent of all participating Justices.

Justices Shin Hyun-chul (Presiding Justice)