Defendant 1 and three others

Defendants

Lee Jin-hun

Law Firm Adodoz, Attorney Kim Min-soo

Seoul Southern District Court Decision 2011Gohap22 Decided July 22, 2011

Of the judgment of the court below, the part on Defendant 1 is reversed.

Defendant 1 shall be punished by imprisonment with prison labor for a period of one and half years.

However, the execution of the above punishment shall be suspended for three years from the date this judgment became final and conclusive.

Of the facts charged in the instant case, it is not guilty of violating the Securities and Exchange Act due to Defendant 1’s breach of duty to report stocks.

All appeals by Defendant 2, Defendant 3, and Defendant 4 are dismissed.

1. Summary of grounds for appeal;

A. Error of mistake

1) Defendant 1 and Defendant 2 did not have conspired with Co-Defendant 3 in the lower court as to the manipulation of market prices.

2) It was true that there was a stock transaction as in the facts charged. However, in order to promote ○○ Group’s restructuring such as the merger of Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”), it was merely purchased Nonindicted Co. 1’s shares in order to secure shares by adding the shares of 51% of the already acquired Nonindicted Co. 1’s shares in addition to the shares of 2/3 or more, a special resolution requirement under the Commercial Act.

3) The most and a circulation order, high-priced purchase order, market price purchase order, and Si/Gun/Ku purchase order as indicated in the facts charged include those not included in the concept of trade prohibited under Article 188-4(1) and (2) of the former Securities and Exchange Act (amended by Act No. 8315 of Mar. 29, 2007 and repealed by Article 2 of the Addenda to the Financial Investment Services and Capital Markets Act (amended by Act No. 8315 of Feb. 4, 2009; hereinafter “former Securities and Exchange Act”).

4) Since the share transaction as stated in the facts charged was financed with the funds of Nonindicted Co. 4 (hereinafter “Nonindicted Co. 4”), Defendant 3 Co., Ltd. (hereinafter “Defendant Co. 3”) and Defendant 4 (hereinafter “Defendant Co. 4”), the profits accrued therefrom belongs to each of the above companies. Thus, when calculating the “profit accrued from the violation” under Article 207-2(2) of the former Securities and Exchange Act, the profits accrued to each of the above companies shall not be included in the profits accrued from the share transaction in this case by Defendant 1 and Defendant 2.

5) The lower court found Defendant 4’s representative director guilty of violating the duty to report stocks held by Defendant 4 among the facts charged against Defendant 1, but at the time, Defendant 4’s representative director was not Defendant 1 but Nonindicted 5, and thus, Defendant 4’s criminal liability as to this part cannot be recognized.

6) In the event that a corporation is punished by a fine due to a violation of Article 215 of the former Securities and Exchange Act, the upper limit of fines shall be calculated on the basis of the profits earned by the corporation from the representative’s violation. The lower court did not distinguish between Defendant 3 and Defendant 4’s own profits.

7) The subject of the duty to report the ownership of Nonindicted Company 4 is Defendant 4 who owns the shares of Nonindicted Company 1, and performing the duty to report is the representative director of Defendant 4. As seen earlier, Defendant 1 is not the representative director of Defendant 4, and thus cannot be the subject of the duty to report the ownership of stocks.

B. Legal principles

1) As to the violation of the Securities and Exchange Act due to market price manipulation, Defendant 1 and Defendant 2 shall be subject to the application of Article 443(2) of the Financial Investment Services and Capital Markets Act, a new corporation, which is less complicated than the former Act, by providing not only Article 207-2(1)2 and (2)2 of the former Securities and Exchange Act but also Article 207-2(1)2 of the former Securities and

2) Since Article 215 of the former Securities and Exchange Act, which was applied by the court below to Defendant 3 and Defendant 4, loses its effect by simply making a decision of unconstitutionality, it cannot be found guilty against the above Defendants based on the above provision.

3) The method of calculating the profit gained by Defendant 1 and Defendant 2 is unreasonable in that it goes against the intent of the Supreme Court precedents on this point.

(1) The lower court calculated profits based on the concept of average sale price, average purchase price, etc., but it is an arbitrary and presumed method.

② The lower court is based on the estimated sales unit price at the time of termination of market price manipulation in calculating unrealized profits, but this is the method of evaluating unrealized profits excessively by failing to reflect trading costs, such as sales commission.

③ In calculating unrealized profits, the lower court deemed the point at which market price manipulation was terminated on August 31, 2007, but the market price manipulation was terminated on November 31, 2007, and thus, the unrealized profits should be calculated as of that time.

④ Although the percentage of the total sales amount reaches approximately 59%, the actual realization profit was not significant, the lower court calculated that the total sales amount was sold in the external form and the profit was realized by selling the entire sales amount.

⑤ Since the rise in Nonindicted Company 1’s stock price during the period of market price manipulation was a result of various other factors, only the profits which are recognized as having a causal relationship with the market price manipulation should be calculated.

4) Article 188-4 (2) 1 of the former Securities and Exchange Act provides for "transaction" as a constituent element, so in order to constitute a crime of violation of the above Act, a trade should be established. Thus, the statement in the facts charged alone does not indicate whether a trade was concluded due to high-priced purchase order, market price purchase order, market price purchase order, and market price/end price purchase order.

C. Unreasonable sentencing

The sentence of the lower court against the Defendants (Defendant 1: 1.6 months in prison, 3 years in suspended sentence, 1.6 months in prison, 2 years in suspended sentence, 3 years in prison, 4 years in prison, 20 million won in prison, 3 companies, and 4 companies) is too unreasonable.

2. Determination:

A. The violation of the Securities and Exchange Act due to market price manipulation

1) misunderstanding of facts

A) Whether there was a public offering and purpose of stock price manipulation

First of all, we examine whether there was an objective of price manipulation in the stock transaction in the instant case.

As to the assertion by Defendants 1 and 2, such as the grounds for appeal, the lower court determined that, on the grounds of the various circumstances stated in the lower judgment, the said Defendants, on the grounds that the said Defendants had dolusent investors at the time of performing stock transaction in this case, knew of the fact that the stock transaction in Nonindicted Party 1 was sexually active or sufficiently aware of the purpose of inducing the transaction. In light of the records, the lower court’s determination appears to be justifiable.

Next, we examine whether there was a public offering of stock price manipulation between Defendant 1 and Defendant 2.

The stock transaction of this case was commenced with Defendant 1’s order, and Co-defendant 3 of the court below stated to the effect that Defendant 1 purchased Nonindicted Company 1’s shares with a surplus money and ordered Defendant 2 to create several securities accounts in the name of the borrower, and that Defendant 2 instructed Defendant 3 to purchase Nonindicted Company 1’s shares through a borrowed account from time to time with Defendant 3, and accordingly, Defendant 2 stated to the effect that Defendant 1 made a stock transaction through a borrowed account with Defendant 1, and that Defendant 1 and Defendant 3 did not know that the stock transaction of this case was conducted through a borrowed account in accordance with Defendant 1’s instructions. In full view of the following: (a) Defendant 1, Defendant 2, and Defendant 3 stated to the effect that the stock transaction of this case was conducted through a borrowed account; and (b) Defendant 1, Defendant 2, and Defendant 3 had known that the stock transaction of this case was conducted through a borrowed account in accordance with the purpose of Defendant 1’s order; (c) Defendant 1, Defendant 2, and Defendant 3.

Therefore, we cannot accept this part of the Defendants’ assertion.

B) Whether there is a type of transaction that is not included in the concept of transaction prohibited by the former Securities and Exchange Act

In a case where an expensive purchase order and an act of disguised sale and purchase, etc. are repeated for the purpose of stock price manipulation, this act constitutes a single and continuous crime under Article 188-4 of the Securities and Exchange Act, which provides for the prohibition of unfair trade such as stock price manipulation, and the protected legal interest of this crime is the social legal interest of securing the fairness and smooth circulation of securities transaction in the securities market or the Association brokerage market, and each individual property legal interest such as each securities owner or issuer, etc. is not the directly protected legal interest, and therefore, it is recognized that each crime is identical with the legal interest of each crime (see Supreme Court Decision 2002Do1855 delivered on July 26, 2002, etc.).

Therefore, in light of the motive of the transaction, the situation before and after the sale, and the economic rationality of the transaction, if the act is likely to cause a fluctuation in the market price by causing an artificial manipulation, not based on the natural demand and supply principle on the securities market under the purpose of price manipulation, it does not need to actually change the market price, and if a series of acts were committed, it is sufficient to cause a fluctuation in the market price due to the overall act. As such, all of them can be deemed to constitute a market price manipulation prohibited by the above Act, by combining all of the facts charged in the instant case. The Defendants asserted that the order was placed at the same price as the immediately preceding or relative price, not at the price, but at the same price as the market price, at the immediately preceding or relative price, at the same price as the market price, or at the same time, at the same price as the market price. However, if there is a possibility of a fluctuation in the market price for 4 months or longer, it does not constitute a series of acts that can be included in the entire market price manipulation.

In addition, the Defendants asserted that the act of conspiracy was conducted in the same name in relation to the most competitive act, and that the sale order was sent and again purchased. However, even if it was made in the same name account, it cannot be deemed that it does not constitute the act of most trade since it would cause mistake in the quantity of trade. The assertion that it is merely a mistake is difficult to believe in light of the evidence duly adopted and examined by the court below. In addition, the Defendants asserts that some of them do not have conspired with others as "the same price" in relation to the act of conspiracy. In addition, the phrase "the same price" in the act of conspiracy does not mean the same price completely, but it does not mean the price within the scope where the order can be established in response to the order, and thus, it does not constitute the act of trade under the former Securities and Exchange Act and Exchange Act and subordinate statutes, and thus, it does not constitute the act of trade under Article 18 through 481 of the former Securities and Exchange Act and it does not constitute the act of trade under Article 18 of the former Securities and Exchange Act and Exchange Act.

C) In calculating the profit gained by Defendant 1 and Defendant 2, whether the exclusion of the profit gained by Nonindicted Co. 4, Defendant 3, and Defendant 4 should be made

The facts charged on the violation of the Securities and Exchange Act due to the stock price manipulation in this case do not mean that Defendant 1 and Defendant 2 traded shares with the purpose of the stock price manipulation in the name of the borrower, but Defendant 3 and Defendant 4 did not trade shares under the name of the borrower. Therefore, solely on the ground that the stock transaction was conducted with the funds of Defendant 3 and Defendant 4, the profits accrued therefrom cannot be deemed to naturally belong to Defendant 3 and Defendant 4. Furthermore, the profits accrued from the violation are calculated based on the transaction during the period of the stock price manipulation as stated in the facts charged, and do not include the profits accrued from the increase in the value of shares held by Defendant 3 and Defendant 4. Even if the profits accrued from Defendant 3 and Defendant 4 are included, considering the status of Defendant 1 as the majority shareholder of Defendant 3 and Defendant 4 and exercising the overall control over the group, such profits can be viewed as profits accrued from the stock transaction in this case. Accordingly, the Defendants’ assertion in this part is rejected.

D) In determining a fine against Defendant 3 and Defendant 4, whether the above Defendants should determine the statutory penalty on the basis of their respective profits.

Under Article 215 of the former Securities and Exchange Act, the “profit accrued from a violation,” which is the basis of fine amount under Article 207(1) of the former Securities and Exchange Act, to be imposed on a corporation, shall be determined on the basis of the profit accrued from such violation. Such profit includes the profit accrued from the trading of market price manipulation and the appraised profit accrued from the increase in the value of the stocks held at the time of termination of the market price (see Supreme Court Decision 2001Do606, Dec. 12, 2003).

As a result of the stock transaction in this case, the share price of Nonindicted Company 1 was increased to KRW 10,550 on August 31, 2007, which was the end of the market price manipulation at KRW 2,975, which was the end of the market price manipulation. At the end of the market price manipulation, Defendant 3 had at least KRW 1,094,842, and Defendant 4 had at least the first acquired at least KRW 1,459,791, and Defendant 3 had at least KRW 820,000,000 and KRW 1,100,000,000,000 won. Accordingly, the amount of fine against the above Defendants is the basis for imposing a fine not exceeding KRW 3 times the above amount pursuant to the proviso to Article 207-2 (1) of the former Securities and Exchange Act. Therefore, the lower court, which did not separately calculate profits earned by the above Defendants, did not admit that the above Defendants’ profits were more than the above amount of profits calculated.

2) misunderstanding of legal principles

A) Whether the Financial Investment Services and Capital Markets Act, which is a new Act of the former Securities and Exchange, provides a minor statutory penalty compared to the former Securities and Exchange Act

This part of the Defendants’ assertion is premised on the fact that, unlike the former Securities and Exchange Act, Article 443(2) of the Financial Investment Services and Capital Markets Act (hereinafter “Capital Markets Act”) which is called a new law under Article 207-2(2) of the former Securities and Exchange Act, the punishment for imprisonment is aggravated, and thus, the punishment for imprisonment has been maintained in a multiple-choice form even after the increase of the fine provided for in the former Framework Act on the Capital Markets.

In light of the language and text of the Defendants, there is no room to interpret that the previous fine is maintained as it is in the form of multiple-choice. However, the statutory provision was enacted in order to strengthen the regulation of unfair trade in the capital market, based on the language and text of the said Act. In addition, when interpreting profits in excess of 50 million won as alleged by the Defendants, even if the provision on aggravated punishment is applied, the statutory provision on aggravated punishment is the same as that on the basic crime, and the provision on aggravated punishment is not the same as that on the other hand, if it is reasonable interpretation that a fine is maintained in the form of multiple-choice form, not only imprisonment but also fine should be aggravated, and if it is interpreted that a fine is maintained in the form of multiple-choice form, it shall be defined in the form of multiple-choice type. In addition, Article 447(2) of the Capital Markets Act provides that “If a person subject to aggravated punishment pursuant to Article 443(1) concurrently imposes a fine pursuant to Article 43(2) of the said Act, it does not require the Defendants to be subject to an aggravated punishment as well as well.

B) Whether it is necessary to establish trading in order to constitute market price manipulation under Article 188-4 (2) of the former Securities and Exchange Act

However, according to the list of crimes attached to the facts charged, the Defendants do not accept this part of the Defendants’ assertion that the facts charged alone indicate both the price and the number of stocks traded according to each market price manipulation. Thus, the Defendants’ assertion that the only part of the facts charged can not be confirmed as to whether the transaction was established (or whether only the sale or purchase order was made, and if the actual transaction was not made, it cannot be punished under the above provision, Article 188-4(2) of the former Securities and Exchange Act prohibits not only the sale transaction but also the act of entrusting or being entrusted with it. Thus, even if the actual transaction was not made, it may constitute market manipulation prohibited under

C) Whether the method of calculating profits due to the violation of the lower court is appropriate

(1) The term “profit accrued from a violation” as stipulated in the proviso of Article 207-2 of the former Securities and Exchange Act refers to the profit accrued from the violation, i.e., gross income generated from the violation, i., the difference from the gross income generated 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) for the transaction in addition to the total sales amount, from the total sales amount, from the total sales amount of the securities transaction related to the actual transaction (see, e.g., Supreme Court Decisions 2002Do1256, Jun. 14, 200; 202Do1855, Jul. 26, 2002; 2002; 300Do1855, supra, if the gross income generated from such violation should be deemed to have been deducted from the total sales amount of the profits generated from the violation.

(2) The lower court calculated the realization profit by means of calculating the average purchase price and the average sale price based on the specific transaction cost during the period of market price manipulation and then multiplying the difference by the daily sale price (the lesser quantity between the purchase price and the sale price). The unrealized profit was calculated by multiplying the remaining quantity at the time of the end of market price manipulation by the difference calculated by subtracting the average purchase price from the market price at that time. This method appears to be appropriate in light of all the circumstances related to the stock transaction in the instant case, and seems not to violate the legal doctrine of the Supreme Court precedents as seen earlier. Accordingly, this part of the allegation by Defendant 1 and Defendant 2 is rejected.

B. Violation of the Securities and Exchange Act due to violation of reporting

1) misunderstanding of facts

A) Whether Defendant 4’s criminal liability due to breach of duty to report stocks owned

The lower court found Defendant 4 guilty by applying joint penal provisions under Article 215 of the former Securities and Exchange Act on the premise that Defendant 4’s representative director at the time of the breach of duty was Defendant 1. However, according to the corporate register of Defendant 4, Defendant 4’s representative director at the time of the breach of duty, at the time of Defendant 4’s breach of duty, was Nonindicted 5, and Defendant 1 was appointed as Defendant 4’s representative director on January 7, 2010. Thus, the lower court erred by misapprehending the fact that Defendant 4’s representative director at the time was Defendant 1.

However, this part of the facts charged, which is a violation that is the premise for recognizing Defendant 4’s criminal liability under the joint penal provisions, is established not by active acts, but by passive acts, i.e., violation of the duty to report stocks, which is established by omission. Unlike the violation caused by active acts in the application of the joint penal provisions, it is not at issue, and only the fact that there is no report that there is only a certain status in the corporation. In other words, as Defendant 4 Company is a major shareholder, and is the subject of the above duty to report, the joint penal provisions apply if it is not reported by the representative director, and the representative director does not affect the application of the joint penal provisions. Accordingly, as long as it can be recognized by the evidence duly adopted and investigated by the court below that Defendant 4 Company was a major shareholder and did not perform the duty to report this part of the facts charged, the conviction against Defendant 4 Company can be recognized.

Therefore, although the court below erred by Defendant 1 as the representative director of Defendant 4 company, this does not affect the recognition of Defendant 4's criminal liability, it cannot be said that the court below erred by misapprehending the above facts alone, which affected the conclusion of the judgment. Accordingly, this part of the defendant 4 company's assertion is rejected.

B) Whether Defendant 1’s violation of duty to report stocks owned by Defendant 4

This part of the facts charged is that Defendant 4 Company bears the duty of reporting stocks as a major shareholder of Nonindicted Company 1. This obligation of Defendant 4 Company, which is a corporation, is realized by the representative act in accordance with the decision-making of representative organ representing the corporation. Accordingly, it appears that Defendant 1 is the representative organ, who is a natural person acting on behalf of Defendant 4, is the subject of the crime. Accordingly, in order to impose criminal liability against Defendant 1 due to Defendant 4’s violation of the Securities and Exchange Act, Defendant 1 should be recognized as the representative director of Defendant 4.

However, as seen earlier, Defendant 4’s representative director is not Defendant 1 but Nonindicted 5, and the facts charged on the premise that Defendant 1 is the representative director of Defendant 4 at the time of the violation of the above duty fall under the case where there is no proof of crime and thus, the judgment of the court below which found Defendant 1 guilty of not guilty pursuant to the latter part of Article 325 of the Criminal Procedure Act.

2) Meritorious of legal principles 1) argument

The Constitutional Court’s decision of unconstitutionality asserted by Defendant 3 and Defendant 4 on the grounds that Article 215 of the former Securities and Exchange Act covers the remainder other than the part on which the subject of the offense is a representative, and thus, the part on “representative” cannot be deemed null and void. It is evident that the lower court recognized Defendant 3 and Defendant 4’s conviction against Defendant 1, the representative director, and applied the part on “representative” on the premise that Defendant 1, the representative director, committed an offense. Accordingly, the Defendants’ assertion on the premise that this part is null

C. As to the assertion of unreasonable sentencing by Defendant 2, Defendant 3, and Defendant 4

The fact that the damages suffered by ordinary investors due to the instant market price manipulation appears to have not been relatively significant, and the instant market price manipulation appears to have been made with the intent to gain economic profits by disposing of the shares through the rise of the stock price, rather than with the intent to gain economic profits, and Defendant 2 did not have any favorable circumstances for the said Defendants, such as Defendant 2 was the first offender.

However, unfair practices, such as stock price manipulation, interfere with the fair price formation due to the supply and demand in the stock market, thereby hindering the promotion and development of the sound stock market, and causing unexpected damages to many and unspecified general investors participating in stock transactions. It is a serious criminal act relating to the economic order. The instant market price manipulation in this case, upon Defendant 2’s order from Defendant 1, repeated orders of the lower court for the most, ordinary trading, and market price manipulation method, which is the typical method of market price manipulation, using multiple borrowed accounts for four months and repeated orders with Defendant 3 in the lower court’s order, and during that period, the crime of gaining unjust enrichment exceeding 4.1 billion won due to the rapid increase in the stock price of the subject stocks, and other factors of sentencing such as Defendant 2’s age, character and behavior, family environment, and the size of Defendant 3 and Defendant 4 company’s operating status, etc., it cannot be deemed that the punishment against the above Defendants of the lower court is too unreasonable.

3. Conclusion

Therefore, Defendant 1’s appeal is reasonable, and under Article 364(6) of the Criminal Procedure Act, without examining Defendant 1’s assertion of unfair sentencing, the part of the judgment of the court below against Defendant 1 among the judgment below is reversed, and it is again decided as follows. Defendant 2, Defendant 3, and Defendant 4’s appeal is without merit. Thus, all of the appeals are dismissed under Article 364(4) of the Criminal Procedure Act. It is so decided as per Disposition (However, from the judgment below against Defendant 2, Defendant 3, and Defendant 4, the judgment of the court below is corrected as follows: each type of “conform” in the separate sheet No. 3 through 5, 24 through 30, and 40 through 51 among the judgment below against Defendant 4, and Article 4-2(b) of the Criminal Procedure Act is changed as “each separate sheet”, and Article 4-2(3) of the Criminal Act is changed as stated

The facts of the crime acknowledged by this court are as follows: (a) each type of "cogniz" in the form of 3 through 5, 24 through 30, and 40 through 51 in the list of crimes attached to the crime of the judgment below, except that "cogniz" shall be deemed to be "cogniz", (b) the whole of 2-B, and Article 4-4-A (a) shall be deemed to be "Defendant 1, a representative director," and (d) shall be as stated in each corresponding column of the judgment of the court below, and it shall be cited by Article 369 of the Criminal Procedure Act.

1. Article relevant to the facts constituting an offense and the selection of punishment;

Article 207-2 (1) 2 and (2) 2 of the former Securities and Exchange Act, Article 188-4 (1) 1, 2, 3, and (2) 1 of the former Securities and Exchange Act, Article 30 of the Criminal Act [the maximum term of imprisonment shall be 15 years in accordance with the main sentence of Article 42 of the former Criminal Act (amended by Act No. 10259 of April 15, 2010), Article 210 subparagraph 5-2 of the former Securities and Exchange Act, and Article 200-2 (1) of the former Securities and Exchange Act (amended by Act No. 10259 of April 15, 201; each violation of the duty to report, such as holding in bulk

1. Aggravation for concurrent crimes;

Article 37 of the Criminal Act, Articles 38 (1) 2 and 50 (Aggravation of Concurrent Crimes within the extent of aggregated of the long-term punishments of crimes above the punishment prescribed in the Securities and Exchange Act due to manipulation of market prices with the largest penalty)

1. Discretionary mitigation;

Articles 53 and 55 (1) 3 of the Criminal Act (The following circumstances considered as favorable to the reasons for sentencing)

1. Suspension of execution;

Article 62(1) of the Criminal Act (Consideration favorable Circumstances among the Reasons for Sentencing below)

Unfair conduct, such as manipulation of stock prices, not only interferes with the promotion and development of a sound stock market by hindering the fair price formation due to supply and demand in the stock market, but also causes unexpected damages to many and unspecified general investors participating in stock transactions, and is a serious criminal act relating to economic order.

The instant market price manipulation, which was ordered by Defendant 1 to Defendant 2 and Co-Defendant 3 of the lower court, repeats the orders for the most and a common method of market price manipulation, which was the most and a common method of market price manipulation, using multiple borrowed accounts for four months, and it is not good that Defendant 1 gains unjust enrichment exceeding KRW 4.1 billion due to the rapid increase in stock price.

However, it seems that the ratio of shares of Defendant 1 and its related persons reached 51%, and the damage of ordinary investors would not have been relatively significant, and the pertinent market price manipulation in the instant case appears to have been made under Defendant 1’s favorable terms, such as the fact that the instant market price manipulation was made in order to gain economic profits by disposing of shares through the increase of the stock price, rather than with the intention to hold shares by raising the stock price.

All these circumstances and other conditions of sentencing, including Defendant 1’s age, character and conduct, family environment, etc., shall be determined as per the disposition.

1. Facts charged;

Any officer or major stockholder of a stock-listed corporation shall report to the respective Securities and Futures Commission and the Exchange the details of stocks owned by him on his own account regardless of in whose name the accounts stand in, and where there is a change in the number of stocks owned by him, by the 10th of the month following the month in which such change occurs.

Defendant 1, as the representative director of Defendant 4 Company, acquired the shares of Nonindicted Company 1,459,79,791 (20.4%) on January 31, 2007, and became the major shareholder. After Defendant 4 sold the shares of Nonindicted Company 1 from December 4, 2007 to December 31, 2007, Defendant 1 failed to make a report thereon to the Securities and Futures Commission, etc. within 10 days thereafter, even though there was a change in ownership by selling the shares of Nonindicted Company 13,510 during the period from December 4, 2007, and the report was made to the Securities and Futures Commission, etc. within 10 days thereafter, from that time to October 10, 208.

2. Determination:

As seen above, the above facts charged do not constitute evidence of crime as stated in Article 2. 2. b. 1 (b) and thus, acquitted under the latter part of Article 325 of the Criminal Procedure Act.

Judges Ansan-jin (Presiding Judge)

Note 1) This part is also an assertion on the violation of the Securities and Exchange Act due to market price manipulation, but it is judged in this part for convenience.

2) Since the above decision of unconstitutionality is based on the premise that it violates Article 208 of the former Securities and Exchange Act, it cannot be said that the entire Article 215 of the former Securities and Exchange Act is invalidated in this case, which is premised on a violation of Articles 207-2 and 210 of the former Securities and Exchange Act.

3) As seen earlier, the representative director does not have any influence on the establishment of a crime, and the facts charged and basic facts are within the same scope, and does not cause disadvantages to Defendant 4’s defense rights. Thus, without any separate amendment of indictment, the representative director’s correction of the part of Defendant 1, without specifying who is the representative director, is deemed to be the representative director without specifying who is the representative director.

4) Article 215 of the former Securities and Exchange Act provides that “the representative of a corporation, regardless of its name, shall be interpreted to include a person who actually represents the corporation in the course of operating the corporation (see, e.g., Supreme Court Decision 96Do1703, Jun. 13, 1997). Defendant 1 is a major shareholder of Defendant 3, Defendant 3 is a major shareholder of Defendant 4, Defendant 1 is a major shareholder of Defendant 1, and Defendant 1 controls several affiliates as the chairperson of ○○ Group. Defendant 1 is a de facto representative of Defendant 4. This part of the facts charged is premised on the premise that Defendant 1 is the representative director of Defendant 4. However, as seen earlier, “the representative of the corporation” includes not only the representative director, but also the actual representative, within the scope of factual relations identical with the facts charged and does not cause disadvantages to Defendant 4’s exercise of right to defense, and thus, it is recognized by revising