[1] The meaning of "the duties of an officer or employee of a financial institution" and "mediation" in the crime of arranging and taking part in Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

[2] Where a financial institution receives money from an investor in return for mediating investors to purchase shares from a financial institution, the case holding that even if a financial institution first requests an intermediary for a transaction of shares, it constitutes a crime of mediating and receiving shares under Article 7 of the Act on the Aggravated Punishment, etc. of Specific

[1] Article 7 of the Aggravated Punishment, etc. of Specific Economic Crimes Act / [2] Article 7 of the Aggravated Punishment, etc. of Specific Economic Crimes Act

[1] Supreme Court Decision 99Do3225 delivered on October 8, 1999 (Gong1999Ha, 2376) Supreme Court Decision 2005Do4062 Delivered on September 28, 2005

Defendant 1 and three others

Prosecutor

Law Firm Dun, Attorneys Kang Sung-sung et al.

Seoul High Court Decision 2005No2205 Delivered on January 27, 2006

The judgment below is reversed and the case is remanded to Seoul High Court.

1. Summary of the facts charged

The Defendants, on May 204, up to 00 won, were traded with 12,00 Won in the stock market. The shares of the non-indicted 2 corporation and the non-indicted 2 corporation, which were under restructuring, were 00,000 won. The shares of the non-indicted 1 corporation and the non-indicted 2 corporation, which were 00,000 won by bidding, are anticipated to be awarded a successful tender at the 6,000 won, so that the above shares may be purchased from the non-indicted 2 corporation (hereinafter referred to as the "Korea Exchange Policy") and sold them in the stock market. The defendants 2 were 0,000,000 won for 70,000 won for 10,0000 won for 10,000 won for 20,000 won for 20,000 won for 20,000 won for 30,000 won for 20,000 won for 30,0000.

2. The judgment of the court below

The court below reasoned that the defendants' act of offering money and goods to the non-indicted 1's officers and employees of the financial institution is hard to accept the money and goods belonging to the duties of the non-indicted 2's officers and employees under Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (hereinafter "the Act"), and that the defendants' act of offering money and goods to the non-indicted 2's officers and employees who are requested to offer and arrange the transaction of the non-indicted 1's shares constitutes acts of offering money and goods under the pretext of mediating or promoting the other party's duties. Thus, the defendants' act of offering and receiving money and goods from the non-indicted 1's officers and employees who are requested to offer and arrange the transaction of the non-indicted 2's shares is not prohibited under Article 7 of the Act, and even if the non-indicted 2's act of offering and arranging the other party's new shares by offering and arranging the other party's shares, it is reasonable to recognize that the third party's act of offering and receiving money from the other party's transaction.

3. The judgment of this Court

However, we cannot accept the above decision of the court below for the following reasons.

Article 7 of the Act provides that "the duties of an officer or employee of a financial institution" shall be established by giving or receiving money or other valuables under the pretext of arranging matters belonging to the duties of an officer or employee of a financial institution. (1) "the duties of an officer or employee of a financial institution" refers to all the duties that the officer or employee of the financial institution deals with while in his/her position. It includes not only the duties belonging to his/her authority, but also the duties that are closely related thereto, and all the acts that are dealt with in relation to such duties. It does not distinguish whether such duties are related to the credit business or main business of the financial institution, and whether such duties are related to other business (see Supreme Court Decision 9Do3225 delivered on October 8, 199), and (2) "reconciliation" refers to "to arrange or facilitate a certain matter between a certain person and his/her other person," and thus, "an act of recommending or soliciting a certain person on behalf of the other person constitutes an act of negotiating" and "an act of recommending the other person on behalf of the person.

However, according to the records of this case, the defendants 2 conspired to invite investors from Hannuri Securities in order to receive the price for mediation from investors, and then the defendant 1 and 2 wanting to purchase the Hanuri Securities by requesting the person in charge of Hannuri Securities to purchase the Hanuri Securities, and actively demanded the money and valuables as the price for the mediation. In fact, the defendants actively acted as a broker for the purchase of the Hanuri Securities to purchase the Hanuri Securities, and received the total amount of KRW 1.35 million from them as the price for the mediation.

Thus, as long as the Defendants received the above money from Nonindicted 1 and 2 in return for mediating Nonindicted 1 and 2, the investor, as a financial institution, to purchase the undisclosed stocks, the Defendants’ act should be deemed to constitute a crime of brokerage and acceptance regardless of whether the Korea Exchange Securities first requested the Defendants to mediate the transaction of stocks.

Nevertheless, as stated in its holding, the court below rendered a judgment not guilty on the ground that the person who requested the defendants to arrange the sale and purchase of the undisclosed stocks is an officer or employee of the Hannuri Securities, who is a financial institution, the investor, Non-Indicted 1 and Non-Indicted 2 merely had been in the position of the counter-party to the brokerage and receiving the price for the transaction from the counter-party to the brokerage, is not subject to punishment under Article 7 of the Act. Thus, the court below erred by misapprehending the legal principles of the crime of taking over and taking over the brokerage stocks, or by misunderstanding facts against the rules of evidence.

4. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)