[1] The requirements required for the solicitation of an issuer to acquire securities newly issued by the issuer to constitute a "public offering" under the Securities and Exchange Act

[2] The case reversing the judgment of the court below on the ground that Article 37 of the Criminal Act promulgated and enforced by Act No. 7077 of Jan. 20, 2004 should be applied to the punishment of concurrent crimes

[1] In full view of the legislative intent of the former Securities and Exchange Act (amended by Act No. 6423, Mar. 28, 2001) and the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 17518, Feb. 9, 2002) and the Securities and Exchange Act (amended by Presidential Decree No. 17518, Feb. 9, 2002), in order for an issuer to be obligated to submit a report to the Financial Supervisory Commission with respect to the securities in question as it constitutes a "public offering under the Securities and Exchange Act", first of all, to enable an issuer to acquire new securities issued by an issuer, such as advertisements through newspapers, broadcasting, magazines, etc., the distribution of printed materials such as notices, public relations leaflets, electronic communications or other similar methods, or to guide the acquisition of securities, and further, the number of persons who are solicited by the issuer is at least 50 persons or at least 6 months from the date of solicitation of subscription by such method should be excluded from the total number of the securities in question (i.).

[2] The case reversing the judgment of the court below on the ground that Article 37 of the Criminal Code promulgated and enforced by Act No. 7077 of Jan. 20, 2004 should be applied to the punishment of concurrent crimes

[1] Articles 2(3) and 8(1) of the Securities and Exchange Act, Article 2-4(1), (3), and (5) of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 17518 of Feb. 9, 2002), Article 2-4(2), and Article 37 of the Criminal Act / [2] Articles 1(2) and 37 of the Criminal Act

[2] Supreme Court Decision 2001Do3178 decided Jan. 27, 2004 (Gong2004Sang, 411)

Defendant

Defendant

Seoul District Court Decision 2003No6440 Delivered on November 19, 2003

The judgment of the court below is reversed, and the case is remanded to the Seoul Central District Court Panel Division.

1. Judgment on the violation of the Securities and Exchange Act No. 3 of the judgment below

A. According to the reasoning of the judgment below, the court below rejected the claim that the defendant's appeal against the violation of the Securities and Exchange Act of Article 3 of the judgment below, namely, the number of persons who recommended the defendant to subscribe for shares is not more than 39 and is not more than 50, and thus, the crime is not established. In the case of public offering to publicly issue securities to many and unspecified persons, Article 8 (1) of the Securities and Exchange Act intends to protect investors by obtaining securities from an unspecified number of investors to undergo examination by the Financial Supervisory Commission regarding the business details of the public offering company in order to prevent unexpected damages by acquiring securities without information on the issuer. Thus, it is reasonable to view that the solicitation of subscription is included not only in the case where the issuer directly or indirectly solicits the issuer to subscribe for securities, but also in the case where the investors respond to the public offering of securities by soliciting the subscription of securities through the issuer, according to the evidence duly investigated and duly adopted by the court of first instance, the defendant's invitation to subscribe for the shares of this case can be found to be five persons.

B. However, the lower court’s determination is difficult to accept.

(1) According to Article 209 subparagraph 1 of the former Securities and Exchange Act (amended by Act No. 6423 of Mar. 28, 2001) and Article 8 (1) of the Securities and Exchange Act, where the total amount of public offering price or sale price of securities is above the amount determined by the Ordinance of the Ministry of Finance and Economy, public offering of new or outstanding securities cannot be made unless an issuer submits a report with respect to the securities in question to the Financial Supervisory Commission for the purpose of which it is not accepted, and any person who violates this provision shall be punished by imprisonment for not more than two years or by a fine not exceeding 10 million won, and Article 2 (3) of the Securities and Exchange Act, Article 2-4 (1), (3), and (5) of the former Enforcement Decree of the Securities and Exchange Act (amended by Presidential Decree No. 17518 of Feb. 9, 200) shall be excluded from the public offering of new or new securities, and the meaning of "public offering of new or new securities" shall be 50 or more persons who are solicited from the public offering of securities in question.

In full view of the relevant provisions and the legislative intent of the Securities and Exchange Act, in order for an issuer to be bound to submit a report to the Financial Supervisory Commission with respect to the securities in question as it falls under the "public offering under the Securities and Exchange Act", first of all, in order for the issuer to acquire the securities newly issued by the issuer, it should be required that the issuer of the securities is engaged in advertising through newspapers, broadcasting, magazines, etc., distributing printed matters, such as notice and leaflets, holding a briefing session for investment, or providing information on the issuance or sale of securities through electronic communication or any other similar means, or providing guidance on the acquisition procedure. Furthermore, in order for the issuer to acquire the securities newly issued by the issuer, the number of persons recommended by such means is not less than 50 persons or at least at least 6 months from the date of soliciting the subscription by such means, not by public offering or public sale (i.e., the number of shareholders, executives, etc. of the issuer shall be excluded from such sum).

(2) However, in light of the facts of the crime acknowledged by the court below as well as the evidence revealed in the record, there is no evidence to deem that the defendant, as the representative director of the non-indicted company, recommended the offer of the advertisement through newspapers, broadcasts, and magazines, etc., distribution of printed matters, such as notice and publicity leaflets, holding a presentation session for investment, electronic communication and other similar methods," and there is no evidence to support that the defendant, as the representative director of the non-indicted company, recommended the offer of the shares of this case directly or in sequence, to pay the share price and received the share price in response to it by the fact that 5 persons who received the share price have reached 5 persons. Thus, it cannot be viewed as an "public offering of securities under the Securities and Exchange Act."

However, according to the records of the case of the 203-year 203-type venture business, the defendant transferred 120,000 shares to the non-indicted 2 company for the first public offering of 1,200,000 shares at the prosecution, and then deposited 60,000,000 won per share to the low-income company, the above 20-class venture business account transfer of shares to the low-income company. However, if the 200,00 won of shares were to be deposited in the first 20,000 shares, it is difficult to view that the 20,000,000 won of shares were to be subscribed by the non-indicted 2 company for the first public offering of shares at the low-income company (the 20,000,000 shares issued by the non-indicted 2 company to the non-indicted 3 company for the first public offering of shares, it is difficult for the defendant to receive 20,000 shares from the low-income company.

(3) Nevertheless, the court below acknowledged that the defendant solicited 55 persons, such as Kim Jong-sung, to offer the minimum amount of 2.3 billion won by soliciting subscription, and found the defendant guilty of this part of the facts charged. In so doing, the court below erred by misapprehending the legal principles on 'public offering of new securities' under the Securities and Exchange Act, and by failing to exhaust all necessary deliberations, which affected the conclusion of the judgment.

2. Determination on remaining crimes

A. In the instant case where the Defendant was sentenced to a sentence of less than 10 years of imprisonment, the reason why the lower court’s sentence is too unreasonable is not a legitimate ground for appeal.

B. However, on June 30, 200, the court below sentenced the defendant to a fine of KRW 300,000 on October 5, 2001 as a violation of the Automobile Management Act from the branch branch of the Seoul District Court's Seoul District Court on June 30, 2001, and sentenced a fine of KRW 1,50,000 from the same court on June 20, 2002 as a violation of the Labor Standards Act, and sentenced the above judgment on October 6, 2002 to a fine of KRW 1,50,00, and sentenced the crimes of Articles 1 and 2 as stated in the judgment and Article 5, respectively.

However, the latter part of Article 37 of the Criminal Act, promulgated and enforced by Act No. 7077 of Jan. 20, 2004, provides that "the crime for which the previous judgment has become final and conclusive" shall be revised to "the crime for which a judgment has become final and conclusive," and the above amended Act does not have any special transitional provision, but Article 37 of the Criminal Act is advantageous to the defendant since it is more favorable for the defendant to make a sentence of a single punishment than a sentence of two concurrent crimes, which is generally applicable to the provision on the punishment of concurrent crimes, unless there are special circumstances, such as the application of the above amended Act would rather be unfavorable to the defendant, and it shall be deemed that Article 1 (2) of the Criminal Act applies mutatis mutandis to the case where a fine and a judgment to be sentenced to a minor punishment

In this case, there is no circumstance to deem that applying the above revised law would rather be disadvantageous to the defendant, so the above revised law should be applied to the defendant. Therefore, since each crime committed by the defendant before or after the final decision of each fine is in a concurrent relationship under the former part of Article 37 of the Criminal Act, one punishment should be imposed.

3. Conclusion

Therefore, with respect to the part concerning the crimes of Articles 3 and 4 in the judgment of the court below as to the crimes of Articles 3 and 4 in the judgment of the court below, without examining the remaining grounds of appeal, since the ground of appeal No. 1 as to the crimes of Articles 3 and 3 in the judgment of the court below is with merit, the judgment of the court below which rendered a single sentence on the grounds that the crimes of this crime and Article 4 in the judgment of the court below are concurrent crimes under the former part of Article 37 of the Criminal Act, and since the crimes of Articles 1, 2 and 5 in the judgment below are

Justices Yoon Jae-chul (Presiding Justice)