[1] Whether Article 188-4 (4) of the former Securities and Exchange Act, which comprehensively prohibits unfair trading of securities, applies to direct and face transactions in the outside market of non-registered and non-registered securities (affirmative)

[2] Whether there exists a causal relationship between the use of false or fraudulent indication documents and the misunderstanding of another person in order to establish a crime of violation of Article 188-4 (4) 2 of the former Securities and Exchange Act (negative)

[1] Article 188-4 (4) of the former Securities and Exchange Act (amended by Act No. 7114 of Jan. 29, 2004) (amended by Act No. 7114 of Jan. 29, 200) prohibits a comprehensive unfair act in relation to the sale and purchase or other transaction of securities, and does not limit the transaction object to the “securities registered in the listing or the Association brokerage market” or limit the transaction place to the “securities market or the Association brokerage market” as provided in paragraphs (1) through (3) of the same Article. Thus, the above provision applies not only to the sale and purchase or other transaction of all the securities included in the securities defined in subparagraphs of Article 2 (1) and (2) of the same Act, but also to the direct and large transaction in the outside market, as well as to the trading on the securities market or the Association brokerage market.

[2] Under Article 188-4 (4) 2 of the former Securities and Exchange Act (amended by Act No. 7114 of Jan. 29, 2004), the term "the act of obtaining money or other benefits from property" was changed to the form of a crime of "the act of causing misunderstanding of other persons by falsely indicating material facts or by inducing other persons to acquire money or other benefits from property by using documents with no necessary facts" in the original text of Article 188-4 (4) 2 of the former Securities and Exchange Act (amended by Act No. 7114 of Jan. 29, 2004). In the amendment (Act No. 5254 of Jan. 13, 1997, the term "the act of causing other persons to obtain money or other benefits from property by causing misunderstanding of other persons," and as long as the term "the act of causing misunderstanding of other persons to obtain money or other benefits from property," the crime of violation of the above Article is established immediately.

[1] Article 188-4 (4) of the former Securities and Exchange Act (amended by Act No. 7114 of Jan. 29, 2004) / [2] Article 188-4 (4) 2 of the former Securities and Exchange Act (amended by Act No. 7114 of Jan. 29, 2004)

[1] Supreme Court Decision 2002Do4561 Delivered on November 26, 2002

Defendant

Defendant

Seoul Central District Court Decision 2002No8457 Delivered on October 22, 2003

The appeal is dismissed.

The grounds of appeal are examined.

1. Article 188-4 (4) of the former Securities and Exchange Act (amended by Act No. 7114 of Jan. 29, 2004; hereinafter referred to as the "former Act") is a general provision on Article 188-4 (1) through (3) of the same Act that prohibits a trade partner comprehensively in relation to "trade or other trading of securities" and does not limit the transaction partner to "securities registered on the stock market or Association brokerage market" or the transaction place to "securities market or Association brokerage market" as provided in Article 188-4 (1) through (3) of the same Act. Thus, the above provision applies not only to the sale and purchase of all the securities included in the securities defined in subparagraphs of Article 2 (1) and (2) of the former Act, but also to the direct and cross-party transaction in the off-the-counter market (see Supreme Court Decision 2002Do4561, Nov. 26, 2002).

The decision of the court below to the same purport is just, and there is no error of law in the misapprehension of legal principles as to the scope of application of the above provision as otherwise alleged in the ground of appeal. The "securities market" mentioned in the decision in the ground of appeal refers to the place where securities transactions are widely conducted including the over-the-counter market, and it is clear in light of the contents of the decision that the above decision does not limit the scope of application of Article 188-4 (4) of the former Act to the case where multiple investors are engaged in competitive trade. Thus, it cannot be invoked

2. Article 188-4 (4) 2 of the former Act was originally regulated in the form of a crime of "acquisition of money or other economic benefits by inducing misunderstanding of other persons by making a false representation of material facts or using documents with no necessary fact omitted." In the amendment (Act No. 5254) on January 13, 1997, the term "an act of inducing other persons to obtain money or other economic benefits by inducing misunderstanding of other persons by making a false representation of material facts or making use of documents with no necessary fact omitted." Thus, as long as the term "an act of inducing other persons to obtain money or other economic benefits by inducing misunderstanding of other persons," the term "an act of causing misunderstanding of other persons or making use of documents with a false or false representation of material facts" is established as a result of the interpretation of the language, so long as it used false or false representation of material facts concerning "in order to obtain money or other economic benefits by inducing other persons to obtain money or other economic benefits," the actual use of documents does not require any effect on the establishment of the crime of false or fraudulent use of documents.

Furthermore, according to the records, each of the documents of this case is delivered before the final decision is made on whether to purchase the shares of this case on the part of Korea Investment Trust Co., Ltd., and it is recognized that the management status of the Co., Ltd. (name of the company omitted) and the evaluation of the investment trust on the future business prospects of the Co., Ltd., and thus, the causal relationship between the

In the same purport, the court below is just in finding the defendant liable for a violation of Article 188-4 (4) 2 of the former Act, and it is not erroneous in the misapprehension of legal principles as to the interpretation of the elements of the above provision or in the violation of the rules of evidence.

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

Justices Son Ji-yol (Presiding Justice)