Where an investor who has acquired stocks in the issuing market or the distribution market due to the act of spreading false information claims damages under the Civil Act on the grounds of tort, the method of calculating the damages suffered by the investor.

In a case where an investor who acquired stocks in the issuing market or the distribution market due to an act of spreading false facts files a claim for damages under the Civil Act on the ground of such an unlawful act, damages suffered by an investor is deemed to have been formed at the time of acquisition of stocks without such unlawful act, and the difference between the actual amount paid by an investor to acquire stocks (where an investor sells stocks at a price above normal share price, the difference between the actual amount paid and the selling price) can be deemed to be the difference between the actual amount paid by the investor and the actual amount paid for the acquisition of stocks. In this context, when calculating normal share price, the difference between the share price trend during the period (case period) affected by an expert’s appraisal and the share price trend that would have occurred without such unlawful act, the share price is deemed to have changed due to the influence of the unlawful act, and a reasonable method of financial and economic methods, such as estimating the normal share price during the pertinent period.

Articles 393, 750, and 763 of the Civil Act

[Plaintiff-Appellant-Appellee] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant-appellee)

Plaintiff (Law Firm KEL, Attorneys Dog-dam et al., Counsel for the plaintiff-appellant)

Korea Bank Co., Ltd. (Korea Boneone Bank CO., Ltd., Ltd., Ltd., Ltd., Ltd. (CLLUMD CO., LTPP) (Law Firm Rate Co., Ltd., Counsel for the plaintiff-appellant)

Defendant 2 and one other

Seoul High Court Decision 2010Na84682 decided January 10, 2013

All appeals and incidental appeals are dismissed. The costs of appeal and incidental appeal between the Plaintiff and Defendant Korea Bank and Defendant Korea Bank are assessed against each party, and the costs of appeal between the Plaintiff, Defendant 2 and Defendant 3 are assessed against the Plaintiff.

The grounds of appeal and the grounds of incidental appeal are also examined.

1. As to the grounds of incidental appeal by Defendant Korea Bank Co., Ltd. on the grounds of incidental appeal Nos. 1, 2, 4, and 6

In full view of the adopted evidence, the lower court acknowledged the facts as indicated in its reasoning, and determined that Defendant 2, the representative director of the Defendant Company, was jointly liable for damages incurred by the Plaintiff’s acquisition of the instant shares, on the grounds that the Plaintiff participated in the capital increase with the instant shares issued by the Defendant Company to acquire new shares at a price higher than the normal share price, and the Plaintiff was aware that the share price formed normally by spreading false information, etc. was the normal share price, thereby purchasing the shares of the Defendant Company on the KOSDAQ. Defendant 3 neglected the above acts of Defendant 2 by lending the name of director to the Defendant Company without his intent to perform his duties.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court’s aforementioned determination is justifiable, and contrary to what is alleged in the grounds of incidental appeal, there were no errors by misapprehending the legal doctrine regarding causation and the good faith principle in tort, or by exceeding the bounds

2. As to the Plaintiff’s grounds of appeal Nos. 1 and 2, and Defendant Company’s grounds of incidental appeal Nos. 3 and 5

A. In a case where an investor who acquired stocks in the issuing market or the distribution market due to an act of spreading false facts files a claim for damages under the Civil Act on the ground of such an act, damages suffered by the investor is the normal share price that would have been formed at the time of acquisition if the investor had not committed such an act and the share price that was actually paid by the investor for the acquisition of stocks (the difference between the actual payment amount and the actual share price if the investor sold at a price above normal share price). Here, the normal share price calculation can be deemed as equivalent to the difference between the share price and the share price that would have been affected by the illegal act (the difference between the actual payment amount and the actual share price if the investor sold at a price above normal share price) and the share price that would have been caused by the illegal act. In a case where the difference is statistically meaningfully meaningful, the share price change is deemed to have been affected by the influence of the illegal act. The average share price index, type of business index, and share price of the same company before or after a certain period of time was calculated based on the most appropriate index for the instant period.

B. The court below acknowledged that the period during which the share price of the defendant company had a statistical meaning from May 10, 2006 to June 20, 2006 due to the defendants' false disclosure, etc., was calculated as damages per share after deducting the difference between the normal share price of June 22, 2006, which is the effective date of the issuance of new shares, and the actual disposal price of the new shares, from the difference between the purchase price of new shares paid by the plaintiff and the actual disposal price of the new shares, the court below found that the difference between the normal share price of June 22, 2006, which is the effective date of the issuance of the new shares, was the plaintiff's losses and the amount calculated as 1,050 won, which is the normal share price of June 22, 2006, deducting 693 won, which is the equivalent amount of the purchase price of the new shares, from the amount calculated as 1,050 won to June 20, 2006.

In light of the above legal principles, the amount recognized by the court below as the plaintiff's damage is identical to the amount that the plaintiff actually paid in order to acquire the shares of this case after deducting the share price deemed to have been formed at the time of acquisition without the defendants' act. Therefore, the conclusion is justifiable. Contrary to the grounds of appeal and the grounds of incidental appeal, the court below did not err by misapprehending the legal principles on the scope of damages or by exceeding

3. The plaintiff's ground of appeal No. 3

Since Defendant 2’s act of spreading false information and false information does not constitute an act of acquisition, such as fraud, embezzlement, and breach of trust, it is permitted to take into account the Plaintiff’s negligence in determining the scope of the Defendants’ liability liability or to limit liability in accordance with the equitable principle. In addition, in light of the records, the lower court’s limitation on the Defendants’ liability ratio to 60% of the damages suffered by the Plaintiff, taking into account the various circumstances as indicated in its reasoning, is not considerably unreasonable

Therefore, the lower court did not err by misapprehending the legal doctrine on offsetting negligence or limitation of liability, or by failing to exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal.

4. As to the grounds of incidental appeal by Defendant Company No. 7

According to the records, the plaintiff filed a lawsuit of this case on July 14, 2008, before the expiration of three years from April 21, 2006, which was before Defendant 2 first made a false publication. Thus, the court below's rejection of the statute of limitations defense by the defendant company is just, and contrary to the allegations in the grounds of incidental appeal, there were no errors of misapprehending the legal principles as to the expiration of the statute of limitations.

On the other hand, in relation to the claim for damages under the Civil Act, there is no evidence to deem that the Plaintiff changed or withdrawn the claim for damages in exchange for this part of the lawsuit, and thus, the assertion of the grounds of incidental

5. Conclusion

Therefore, all appeals and incidental appeals are dismissed. The costs of appeal and incidental appeal between the plaintiff and the defendant company are assessed against each party. The costs of appeal between the plaintiff, the defendant 2 and the defendant 3 are assessed against the plaintiff. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Ko Young-han (Presiding Justice)