The method of calculating the amount of damages, in cases where ordinary investors have suffered damages due to unfair trading practices, such as market manipulation prohibited under the Securities and Exchange Act.

Article 188-5 (1) (Liability for Damages) of the Securities and Exchange Act provides that "any person who violates the provisions of Article 188-4 shall be liable to compensate for damages sustained by a person who has traded or entrusted the relevant securities on the securities market or Association brokerage market due to the price formed by such violation." However, there is no specific provision as to the amount of damages to be compensated for. However, the amount of damages sustained by a victim who has traded the relevant stocks in the stock market due to unfair trade practices, such as price manipulation aimed at acquiring the difference by increasing the share price of stocks, etc. shall be deemed to be the prices formed by such unfair trade practices and the prices formed by such unfair trade practices, which would have been able to purchase and have been able to purchase by the victim.

[1] Articles 188-4 and 188-5 of the Securities and Exchange Act

Heon and twenty others (Attorney Kim Chang-ho, Counsel for the plaintiff-appellant)

El District Fire & Marine Insurance Co., Ltd. and one other (Law Firm Innju General Law Office, Attorneys Song Jae-won, Counsel for the plaintiff-appellant)

Seoul District Court Decision 98Gahap52839 delivered on April 27, 2000

1. The part of the lower judgment against the Plaintiffs falling under the following order to pay shall be revoked.

The defendants jointly and severally pay to the plaintiffs the amount of compensation in the list of stock trading statements (attached Form) with 5% per annum from July 8, 1998 to December 5, 200, and 25% per annum from the following day to the full payment date.

2. The plaintiffs' remaining appeals are dismissed.

3. The total cost of the suit is divided into two parts, one of which is the plaintiffs, and the other is the defendants' each charge.

4. The part ordering payment under paragraph (1) may be provisionally executed.

The Defendants jointly and severally against the Plaintiff U.S. 25,920,00 won, 86,786,000 won, 39,000 won, 39,000 won, 83,060,000 won, 150,000 won, 1,400,000 won, 18,000 won, 18,000,000 won, 16,000 won, 26,60,000 won, 26,60,000 won, 26,000 won, to the Plaintiff U.S. 205, 8,000 won, 6,000 won, 158,69,000 won, 7,0000 won, 60,000 won, to the Plaintiff Kim Jong-ju, 158,69,000 won, 608,808,000 won, 9,6,00008,000 won,

1. Basic facts

The following facts are not disputed between the parties, or are recognized by Gap evidence 2-5, 6, 4-2, 3, 7-1 through 25, and the court below's fact inquiry results with respect to the Korea Stock Exchange.

A. Market price manipulation

In collusion with Non-party 1, the chief of the team team of the defendant Lan District Fire Maritime Insurance Co., Ltd., the non-party 2, the chief of the division of the Co-Defendant 1, the non-party 2, and the non-party 3 of the defendant Il-il Bank Co., Ltd., on December 1996, in which the non-party 4 Co-Defendant 1 conspired with Non-party 5, etc., the representative director of the non-party 1 and the non-party 1, while the total number of shares as listed corporations is less than 1060,00 shares, and there are less than the quantity of shares traded in the stock market, so the non-party 1 and the non-party 3 were selected as so-called "the shares of this case" as the target of operation of the so-called "the shares of this case" to increase the price of the shares of this case through the manipulation of market price to 97.197 billion won through the manipulation of supply and demand.

On April 3, 1998, Nonparty 1, 2, and 3 filed a complaint with the Securities and Exchange Commission on April 3, 1998, and Nonparty 1 and 3 filed a prosecution by a prosecutor on June 30 of the same year, respectively, and Nonparty 2 was sentenced to a suspended sentence for one year, and Nonparty 2 was sentenced to a judgment of conviction for two years, which was sentenced to a suspended sentence for ten months (Seoul District Court Decision 98Gohap358 of the Securities and Exchange Act, etc.) (Seoul District Court Decision 98No1783 of the same year). On November 13 of the same year, Nonparty 1 was convicted of a fine of 20 million won from each appellate court (Seoul High Court Decision 98No1783 of the same case). The judgment of the above appellate court was dismissed by Nonparty 1, etc. on March 23, 199 (Supreme Court Decision 98Do43277 of the same case).

B. Change in the stock price of the instant case

The share price (which refers to the closing price when there is no special explanation) of the instant shares was 73,00 won per share on January 7, 1997 when the market price manipulation began, but the highest price was 159,500 won per share on June 20 of the same year due to the market price manipulation, which was 142,00 won on November 7, 199 when the market price manipulation was actually finished. However, the share price of the instant shares was 107,50 won on the 19th day of the same month when the market price manipulation was completed, and 9,00 won on the 19th day of the same month when the market price manipulation was completed, and 9,00 won on the 20th day of the same month, 71,100 won on the 25th day, 65,000 won on the 29th day, 40,400 won on the 29th day, 30,810 won on the 10.

C. The plaintiffs' share transaction

The plaintiffs purchased the shares of this case from November 5, 1997 to March 20, 198 through the securities account in the names of the plaintiffs established in securities companies, such as Seoul Securities, teachers' right to guarantee, East Securities, new securities, cash securities, consideration securities, and SK securities, and sold all of the shares of this case until March 20, 1998. The specific details of the stock transaction are as stated in [attached Form] the date of purchase, quantity, unit price of purchase, purchase price, purchase price, sale date, quantity, sale price, sale price, and sale price column, and the amount of loss (the amount after deducting the sale price from the purchase price) suffered by the plaintiffs from the sale of the shares of this case is as stated in [attached Form] 1,314,023,00 won in total as stated in the share transaction statement column.

2. Occurrence of liability for damages;

The above acts by Nonparty 1, 2, and 3 are unfair trade practices, such as market price manipulation, which are prohibited under Article 188-4 (1) 1, 2, or (2) 1 of the Securities and Exchange Act. Thus, Defendant El branch Fire and Marine Insurance Co., Ltd., the employee of Nonparty 1, and Defendant Il branch Co., Ltd., the employees of Nonparty 3, are jointly and severally liable for damages suffered by the plaintiffs who traded the shares of this case pursuant to Article 188-5 (1) of the same Act.

3. Scope of liability for damages

A. Scope of damages

(1) Article 188-5(1) of the Securities and Exchange Act provides that "any person who violates the provisions of Article 188-4 of the Securities and Exchange Act shall be liable to compensate for damages which a person who has traded or entrusted the securities in question on the securities market or Association brokerage market suffers from the price formed by the violation." However, there is no particular provision for the amount of damages to be compensated.

However, as in the instant case, the amount of damages sustained by the victim who purchased the stocks in a stock market due to unfair trade practices, such as price manipulation aimed at raising the stock price and acquiring the difference, shall be deemed the difference between the share price formed by the said unfair trade practices and the share price formed by such unfair trade practices, which would have been able to be purchased by the victim (hereinafter referred to as "ordinary share price"), and the share price formed by such unfair trade practices, and the share price actually purchased by the victim (hereinafter referred to as "market price"). The reasons are as follows.

First, the amount of loss suffered by the victim due to the original manipulation is the difference between the price and the disposal price as of the date of the closing of argument in the case of holding the shares, and the difference between the manipulation price and the disposal price in the case of disposing of the shares. In the case of immediately viewing such loss as losses, it is necessary to determine the amount of loss based on a certain point of time because the scope of damage is vary depending on the extreme circumstances such as whether the victim holds or disposes of the shares, and the difference between the disposal price and the disposal price in the case of disposing of the shares. Therefore, it is reasonable to regard the time of purchase of shares as the time of closing of argument or disposal.

Second, in the case of unfair trade practices, such as price manipulation with the aim of acquiring the difference by increasing the share price of the stock concerned, the person who committed the act shall place an appropriate share price of the stock concerned at a price higher than that of the pertinent share price, thereby making unfair profits equivalent to the difference between the pertinent share price and the pertinent share price. Accordingly, the victim shall be deemed to have suffered losses equivalent to the difference between the high-level share price and the pertinent share price. Therefore, the difference between the high-level share price and the pertinent share price is an important standard for determining the scope of the actor's profit and the scope of losses.

(2) First, we examine the normal share price of the instant shares.

The share price in the stock market is the result of the deliberation of the stock investor that comprehensively reflects the overall situation related to the shares, i.e., the business performance, prospects, debt ratio, image, the number of generated stocks and the trading volume, etc. of the company issuing the shares, and therefore it is virtually impossible to estimate the normal share price according to the increase or decrease in certain acts or conditions at a certain time because it is repeated during a day.

However, in full view of the whole purport of the oral argument as to the shares of this case, Gap evidence Nos. 5 and the above fact-finding, the share price of this case from June 18, 1994 to September 196 was between approximately 35,000 won and about 65,00 won. The overall increase from September 2, 1996 to about 43,400 won, and up to 102,00 won until November 30 of the same year, which was somewhat reduced from the next day until January 7, 1997, but until the time when the above market price manipulation began, the share price of this case was 10,00 won until 0,000 won, and the share price of this case was 10,000 won until 10,000 won, which was 10,000 won until 10,000 won, which was 10,000 won after the beginning of the oral argument of this case.

(3) Next, we examine the share price of this case.

According to the above facts-finding statement No. 5 and the purport of the above fact-finding, the stock price of this case was 1.7,00 won on January 7, 1997 when the non-party 1 et al. commenced, and continuously increased to 96,00 won on April 17, 197, but it was 151,00 won on June 23, 197, and thereafter decreased to 117,00 won on November 1, 197, and 197.7, the price index of this case was 142,00 won on July 7, 1997, and the price index was 15,00 won on July 1, 197, and the price index was 15,70 won on July 1, 197.

(4)Therefore, the difference between the normal share price (102,00 won) and the operating share price is calculated as follows.

(A) In the case of the plaintiffs except for the Plaintiff’s organic seat, maximum attendance, Kim Young-hee, and Kim Jong-hee, the amount of damages shall be the amount corresponding to each of the damages column in the item of the share transaction list, which is the difference between the normal share price and the operating share price.

(b)However, the damage amount suffered by the above plaintiffs is greater than the amount stated in the separate sheet of stock transaction, because the amount stated in the separate sheet of stock transaction, which is the difference between the normal stock price and the manipulation price, is a difference between the purchase and sale of the shares purchased on November 6, 1997 and the shares of 930 shares purchased on November 6, 197 in the case of the plaintiff's best stock price (attached Form), and the difference between the normal stock price and the manipulation price (attached Form).

In addition, in the case of Plaintiff Kim Young-hee and Kim Jong-hee, the normal share price of November 25, 1997 was lower than 83,90 won (attached Form) and the part indicated in the list of stock transactions (attached Form) was incurred by Nonparty 1, etc., but there is insufficient proof of special circumstances that Nonparty 1, etc. could have anticipated or anticipated the decline of the share price compared to the normal share price. Thus, it cannot be deemed as damages caused by unfair trade practices, such as the manipulation of market prices by Nonparty 1, etc., and it cannot be deemed as damages caused by such unfair trade practices as the manipulation of market prices by Nonparty 1, etc., and it shall be the corresponding amount of damages as stated in the column of damage in the list of stock transactions.

(b) Set-off of negligence;

On the other hand, according to the above facts, the plaintiffs did not confirm the overall situation related to the shares of this case and did not dispose of the shares of this case at an appropriate time when the purchase price of the shares of this case and the price increase of the shares of this case. Such errors were caused by the occurrence or expansion of the damage of this case, and thus, the amount of damages to be paid by the defendants should be considered in determining the amount of damages to be paid by the defendants. However, considering all the circumstances such as the reasons leading up to the stock transaction of this case, the reasons leading up to the transaction of this case, the amount of losses suffered by the plaintiffs, and the reasons leading up to and the result thereof, it is reasonable to set at 50%

Therefore, when considering the above negligence, the amount of damages to be paid by the Defendants to the Plaintiffs is the amount stated in the list of stock trading statements.

4. Conclusion

Therefore, the defendants are jointly and severally obligated to pay to the plaintiffs the amount of compensation as stated in the specification of stock transaction (attached Form) and to pay damages for delay at the rate of 5% per annum as stipulated in the Civil Act from July 8, 1998 to December 5, 2000, which is the date on which a copy of the complaint of this case was delivered to the defendants as requested by the plaintiffs, and from July 8, 1998, it is deemed reasonable that the defendants dispute about the existence and scope of the obligation to pay damages for delay at the rate of 25% per annum as stipulated in the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the next day to the date of full payment. Thus, the plaintiffs' claim of this case is accepted within the scope of the above recognition, and the remainder is dismissed for reasons without merit. Since the judgment of the court below is unfair with a different conclusion, it is ordered to pay it to the defendants, and the remaining appeals of the plaintiffs are dismissed for each reason.

Judge Oh-hyn (Presiding Judge) and the Constitutional Court