(영문) 서울중앙지방법원 2014.5.23. 선고 2013고합1293 판결

Defendant A shall be punished by imprisonment with prison labor for a year and six months, and by imprisonment with prison labor for a period of six months.

However, with respect to Defendant B, the execution of the above sentence shall be suspended for one year from the date this judgment becomes final and conclusive.

Of the facts charged against Defendant A, the charge of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

Reasons

Criminal History Office

On May 13, 2013, Defendant A agreed to jointly manage G with H on the condition that H, the representative director of G Co., Ltd. (hereinafter referred to as “G”) and the bonds with warrants issued by G, as a telecommunications equipment manufacturer, would pay an amount equivalent to KRW 3 billion in the bonds with warrants issued by G, as a result, Defendant A agreed to jointly manage G, and acquired the said company, as the chairperson of G, while performing duties as the chairperson of G, and practically managing the overall business of G’

Defendant B has been requested by the representative director or large shareholder of the listed company to sell and purchase shares as a bond company, and if the loss is compensated for, and if profits occur, the company will sell and purchase shares on the condition that profits are distributed according to the agreed ratio.

1. Violation of the prohibition against stock price manipulation by the Defendants

(a) The background and conspiracy of crimes;

On July 2013, Defendant A issued G in the preceding year and circulated the market price with H et al. by disposing of new shares, which is equivalent to KRW 6 billion (5th) with separate type of bonds with warrants (5th) and H’s preemptive rights. At the time of the conversion of the preemptive rights into KRW 2,650,00, the stock price was lower than KRW 2,650,000, since the stock price was lower than KRW 2,200,000, the stock price was higher than KRW 2,650.

Defendant A, as the bond company, had I (Ga name J), K, L, and M take over the above bonds with warrants of KRW 6 billion, and had them take over the new stocks of G by exercising the preemptive right, but agreed to distribute the profits or return all the remaining profits except the interest agreed upon to by the bond company when the stock price increases.

Accordingly, I paid the subscription deposit in the name of N,O, P, and Q, and K, L, and M paid the subscription deposit in its own name and was issued new shares as shown below.

Defendant A, as the shares of G rise from KRW 2,275 on July 4, 2013 to KRW 2,860 on the 26th day of the same month, sold the shares newly issued as above, thereby gaining profits from the sale of the shares. As such, when it is anticipated that the share price will decline when the shares newly issued are sold to the market at once, Defendant A was able to manage the share price by means of mobilization of the changed share price and requesting them to purchase the shares.

Accordingly, Defendant A entered into an agreement with S (one person T) to pay 15% of the purchase fund on the face of the purchase of G’s shares as a collateral for loss and compensate for the loss if the loss is incurred, and the purchase of shares was made on the condition that the purchase would be made against 50:50 if the loss would be compensated for. Defendant B would pay 15% of the purchase fund including interest and the amount of loss security when the purchase of G’s shares was made, and requested Defendant B to purchase shares on the condition that the loss would be compensated for if the loss would be incurred.

(b) Specific methods of manipulation;

Defendant A, from July 29, 2013 to around the 30th day of the same month, determined the quantity of shares to be sold to R by telephone, and decided that R purchase the same quantity of shares at the same time.

Accordingly, I, in fact, referred to as the sale of shares to U who is in custody of 1,132,074 shares of the above new shares as ordered by Defendant A, and U sold 49,502 shares in the N’s key securities account (V) in accordance with the orders of Defendant A and H on July 29, 2013 and July 30, 2013, 190,000 shares in the name of 0 new investment securities account (W), 170,000 shares in the name of 0, 160 shares in the Korean securities account (Y) account in P’s name, and 569,502 shares in the aggregate of 160,00 shares in the name of 569,50 shares in the Korean securities account (Y) account in P.

On the other hand, according to the agreement with Defendant A, Defendant B purchased 76,161 shares via R with the K’s K-based C-based C-based C-based C-based C-based C-based C-based C-/L’s K-based C-based C-O’s K-based C-O’s K-based C-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K-U’s K.

Defendant A managed the sale and purchase of shares as above and ordered U to sell 569,502 shares, and ordered Defendant B and S to purchase 542,461 shares through R. Among them, U submitted an order to sell 50,000 shares from the Korean Securities List Account (Y) account in the name of 12:44:5 P on July 29, 2013 to 3,200 won. On the same day, S requested purchase of shares through 12:43:45 R from the Han Securities List Account (AG) in the name of AF under its management to purchase 3:20,000 shares from 3,200 won to 3,200 won and 3,200 won and 3,838 shares, as shown in the attached Table 16:67, July 29, 2013 to enter into a mutual agreement between 3,200 won to 3,83838 shares in the name of AF.

Accordingly, in collusion with R and S, the Defendants acquired unjust enrichment of a sum of KRW 318,470,000 in total in the Korean securities account in the name of P, 95,710,000 in total, in the name of N in the manner of misleading or misleading others to make a false judgment, and trading with the intention of inducing the sale and purchase, or trading with the intent of inducing the sale and purchase, 26,630,000 won in the account in the name of N in the name of N, 118,370,000 in the account of new investment securities account in the name of zero, 95,710,000 in the account of new investment securities account in the name of zero, and 77,760,000 in the account of Korean securities account in the name of P).

2. Occupational embezzlement by Defendant A;

around September 5, 2013, Defendant A offered small-sum public offering with capital increase and received 99,000,000 stock subscription deposits from ordinary investors and received them for the company, Defendant A instructed AH on and around the 6th of the same month to transfer KRW 100,000 to the account in the name of AI, which is the Defendant’s seat.

On September 16, 2013, the Defendant: (a) around September 16, 2013, G had AJ pay KRW 80 million out of the above funds to AK, which is the gambling creditor of the Defendant, while the Defendant provided AJ with a promissory note and the shares required to be protected as security and received KRW 400 million borrowed.

On October 2013, Defendant A provided the said vehicle as security and borrowed KRW 28 million while keeping 9 vehicles owned by the Company for the purpose of business.

Accordingly, Defendant A embezzled an amount of KRW 180,000,000 and KRW 28,000,000 at the market price of the company owned by the company in collusion with AH.

Summary of Evidence

1. Defendant B’s legal statement

1. The defendant A's partial statement

1. Each legal statement of R, U, AM, M,N, and AO;

1. Each legal statement of AP, H and I;

1. Each prosecutor's statement of R, U, and Q;

1. AH a copy of each prosecutor's statement;

1. Each statement of the R and AB;

1. Korean investment securities and treatment securities trading report, a written agreement on stock security loans, a full certificate of each registered matter, all G disclosures, investigation reports (the current status of exercise of bonds with warrant by theG), investigation reports during 2013, conclusion forms, joint management contracts (G,S), joint management contracts (the title of exercise of bonds with warrant by the G), eight-time non-registered private placement acquisition contracts, meeting minutes of the board of directors, agreement for joint projects, agreement on cash loan and bond with warrant, investigation reports (113 pages), the details of exercise of the fifth-time preemptive right, five-time non-guaranteed bonds with warrant, G5-time non-guaranteed bonds, A and HH cards, investigation reports (Investigation Records 1249 pages), list of crimes committed in conspiracy, G ordinary share hearings, reports on waiver of management rights, and reports on the application of Acts and subordinate statutes;

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

(a) Defendant A: Articles 443(1)4 and 5, 176(1)1 and 176(2)1 of the Financial Investment Services and Capital Markets Act, Article 30 of the Criminal Act (the point of market manipulation, comprehensive application of manipulation), Articles 356, 355(1), and 30 of the Criminal Act; Articles 356, 35(1), and 30 of the Criminal Act (the point of occupational embezzlement and the choice of imprisonment);

(b) Defendant B: Articles 443(1)4 and 176(1)2 of the Financial Investment Services and Capital Markets Act;

1. Aggravation for concurrent crimes;

Defendant A: the former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act (the heavier capital market than the quality of the crime and the penalty concurrent crimes prescribed by the Financial Investment Services and Capital Markets Act)

1. Suspension of execution;

Defendant B: Article 62(1) of the Criminal Act (Consideration favorable circumstances as seen below)

Judgment on the assertion of Defendant A and Defense Counsel

1. As to the violation of the Financial Investment Services and Capital Markets Act

A. Summary of the assertion

Defendant A requested S and Defendant B to purchase G shares through R from July 29, 2013 to July 30, 2013. However, this is merely a market price manipulation with a view to maintaining G’s share price higher than the conversion price of preemptive rights, because G’s share price has increased considerably from July 26, 2013.

Defendant A did not have ordered U to sell G stocks through I, and the time, unit price, and quantity in requesting S and Defendant B to purchase G stocks is not the same as the time, unit price, and quantity was designated. Thus, Defendant A cannot be deemed to have engaged in a competitive transaction.

B. Determination

Comprehensively taking account of the following circumstances acknowledged by the evidence as seen earlier, Defendant A, in collusion with H, acquired new shares using new stocks held by H, and sold them to the market. On the other hand, Defendant A, by paying security money to the S and B, and by allowing them to purchase G shares at the time of exercising the preemptive right, made an unjust enrichment equivalent to the difference between the sale price and the conversion price of preemptive rights. Furthermore, it is reasonable to view that the part on which a mutual sales contract was concluded between the sale price and the purchase price constitutes a collusion under Article 176(1)1 of the Financial Investment Services and Capital Markets Act, and thus, Defendant A’s allegation in this part is rejected.

1) On March 2, 200, H and Defendant A et al. entered into a joint management agreement with G, along with AP and AT, established G, and engaged in the business of developing and selling electric wires measuring instruments. G was listed in the KOSDAQ around 2006. However, since around 2012, H began raising funds by accessing the corporate bond market due to its financial difficulties. From around 2012, H began to raise funds, and since 2013, it was in a state in which it is unable to discharge its liabilities with the company’s funds.

Accordingly, on May 13, 2013, H agreed with Defendant A, AH, and A0 to jointly manage G on the condition that Defendant A, AH, and AO attracts funds of at least three billion won in G. According to the above joint management agreement, Defendant A was the president of G, and AH was appointed as management manager, and AO was able to raise funds of at least eight billion won and support G. However, Defendant A, A, and AO did not raise funds equivalent to the amount originally promised.

2) Claim for early redemption of Schlage’s corporate bonds

G issued the fifth bonds with warrants on June 28, 2012, the fifth bonds with warrants, and Schlage’s 6 billion won among them, and AU took over 1 billion won respectively.5) H purchased the preemptive right of 120 million won from Schlage’s August 2012, and around July 1, 2013, each of the 6 billion won bonds with warrants owned by Schlage’s 5th bonds with warrants. The maturity of the bonds with warrants owned by Schlage’s 6 billion won was until June 28, 2015, but the initial redemption was possible after the lapse of one year from the date of issuance, which was 10 million won from the date of the bonds with warrants, and the initial redemption was made from the date of the bonds with warrants, which was 6 billion won from the date of the bonds with warrants, and the initial redemption was made from the date of the bonds with warrants, which was 200 billion won from the date of their issuance.

While Defendant A and H considered the method of preparing funds to repay the above obligations to SP Investment, it seems that Defendant A and H were able to acquire new shares by exercising the preemptive rights of G 5th bonds with warrants held by H with the prior consent, as seen below, and that Defendant A and H were willing to obtain profits from the market price by either artificially supporting the aforementioned shares so that they can maintain their share price higher than the conversion of preemptive rights.

3) The reasons why H raised funds of KRW 3 billion from U

H on July 3, 2013, through I, lent KRW 3 billion to UO H by the due date until August 3, 2013, and by the interest rate of 6% (pre-payment) between U and U.S. H, and H offered U as collateral the amount equivalent to KRW 3 billion of G’s preemptive right to new stocks to stocks. U sold the above shares at the due date and recovered the leased principal and returned the excess amount to H as settlement money, and H agreed to pay KRW 1 billion to U in preparation for damages suffered by U due to the price decline in the process.

U raised 3 billion won from the previous owners of G to N,O, Q, and P under the above agreement, and paid 3 billion won as the purchase price of new shares. H converted 3 billion won from the preemptive rights acquired from Schlage's Republic of Korea on July 4, 2013 to N,O, P, and Q into each account in the name of N, P, P, and paid 180 million won as the 8.5 billion Won as the 6.5 billion Won as the 6.5 billion Won as the 6.5 billion capital in the name of G, and 6.65 million capital in the name of AX as the 6.7.1 billion capital in the name of A, A, the 6.2.761 billion capital in the name of the 20136.7 billion capital in the name of the 2013.761 billion capital in the name of G, as the 2016.27 billion capital in the name of the 2016.71 billion capital in the 27.27.7137.

4) The reasons why Defendant A raised funds from M, K, or L

On July 4, 2013, Defendant A, through H, paid KRW 400 million to Defendant A through M with a loan claim of KRW 70 million to Defendant A, and Defendant A provided KRW 500 million to Defendant A to exercise the preemptive right by providing it with an amount equivalent to KRW 500 million with H’s bonds with warrant held by Defendant A. In the last time, Defendant A agreed to sell new shares and pay KRW 700 million with the profits accrued from the sale of the outstanding shares and preferentially pay KRW 700 with the M’s bonds, and then, Defendant A accepted KRW 188,679 by exercising the preemptive right to new shares with a total of KRW 40 million with a total of KRW 50 million with a total of KRW 188,679 on the same day, and the acquisition price of new shares was paid as the bonds attached to the above preemptive right.

On July 5, 2013, Defendant A paid KRW 2.5 billion between K and L, and Defendant A paid KRW 2.5 billion to Defendant A, and Defendant A paid KRW 2.5 billion to K and L to exercise the preemptive right, but agreed to sell new shares and make a half of profits or pay a certain amount of interest upon the increase in the price of the new shares. K and L paid KRW 2.5 billion to Defendant A in accordance with the above agreement, and exercised the preemptive right to new shares totaling KRW 943,395 by exercising the preemptive right to new shares (K754,716 note L + 18,679 note). Defendant A paid KRW 500,000,000,000 paid KRW 2.5 billion to each of the instant owners of the new shares. Defendant A paid KRW 500,000,000,000,0000,000,000,000,000.

5) On July 4, 2013, U’s early disposal of U’s part of U’s shares held 1,132,074 shares converted the amount equivalent to KRW 3 billion from the preemptive right offered as collateral by H to the shares. At that time, G’s share price was lower than the conversion price of preemptive right (2,650 won per share) and the amount of loss security was lower than KRW 850,000,000,000, which was less than the initial agreement, there was apprehension that even if the shares were disposed of later, the remainder after deducting the amount of loss security from the leased principal may not be recovered.

U sold approximately KRW 110 million from July 17, 2013 to July 23, 2013 to recover the loan in advance before G share price falls. He sold approximately KRW 482,074 share out of the G shares he owns from July 17, 2013 to July 23, 2013.

6) The share price of G sale of principal shares, which took place from July 29, 2013, maintained 2,200 to 2,400 won as of July 22, 2013 as of the closing price, and increased respectively by 2,520 won on July 23, 2013, and 2,52,615 won on July 24, 2013, and 2,830 won on July 25, 2013, and 2,830 won on July 26, 2013, and 2,860 won on July 26, 2013, and on July 29, 2013, 3,270 won on July 3, 2013, and 3,305 won on July 30, 2013 (the highest price per day).

H demanded on July 29, 2013 U to sell all 1,132,074 shares held as security of the above loan to U, and 12) Defendant A also demanded the same content as U through I. Do. 13) Until then, U calls calls to H for sale of dys shares and dys, but H said that “I sell shares as I sell dys and dys,” while H said that “I sell shares as I sell dys and dys.” 14)

However, as seen earlier, U already disposed of 482,074 shares during the period from July 17, 2013 to July 23, 2013 during which G share price was low, and as such, U sold only the remaining shares in the event that the share price sharply increased and H makes a settlement with the Plaintiff, the sales price calculated from July 17, 2013 to July 23, 2013, which was the actual disposal date, and the sales price calculated from July 29, 2013 to the sale price calculated by Defendant A and H, which was ordered by Defendant A and H, were insufficient to be equivalent to the difference between the sale price calculated as the share price around July 29, 2013 and the sale price calculated by Defendant A and H, which was ordered by the said share price, was set out in the place where H would compensate for the said difference.

Accordingly, U is willing to conceal the fact that the shares were disposed of in a lump sum by making the content of concluding a sales contract for the entire shares that were first offered as security from H by re-samping them, and if you sell the entire shares to H at once, they may be a problem later, and if you sell the shares to H, they would be a problem later, they would have been sold in a fixed amount every two to three days, and they would have obtained the consent, and 15) through I contact with Defendant A through I with the same intent as Defendant A. As such, U collected shares in his money from July 29, 2013 to July 31, 2013. On the other hand, U sold shares in a way designated by Defendant A in a time zone.

7) Purchase of shares between S and Defendant B

On July 26, 2013, the defendant A and the Z, the agent of SB, purchased 1.0 billion won of G stocks between July 29, 2013, and the defendant A paid 15% of the purchase price to S as loss security deposit. 18) The defendant A sold the shares so purchased and recovered, but if the profits occur against S and the defendant A, they would compensate for the principal and 3% interest of the 12% interest of the purchase price. If the share price exceeds 12% of the purchase price, the defendant A and the 200 billion won interest of the 30 billion interest of the 20 billion interest of the 20 billion interest, and the 30 billion interest of the 20.7 billion interest of the 3 billion interest of the 20.19% interest of the 20.3% interest of the 3 billion interest of the 20.2 billion interest of the 3 billion interest of the purchase price.

As above, 569,502 shares sold by U from July 29, 2013 to July 30, 2013, and 542,461 shares purchased during the same period by S and Defendant B are 160,696 shares in total, and the period of conclusion is from July 29, 2013 to July 30, 2013.22)

8) Notwithstanding that the share purchase price U as a result of the purchase of shares sold large volume of G shares held for both days on July 29, 2013 and July 30, 2013 as stated in the facts constituting a crime, G’s share price was KRW 3,270 as of July 29, 2013, and KRW 3,305 as of July 30, 2013.

It seems that S and Defendant B purchased G shares by purchasing 542,461 shares (335,00 shares + 207,461 shares) at a time similar to that during which U shares are sold during the same period, and it seems that individual investors, called so-called 'unified', have taken advantage of the fact that G shares are sold in bulk during a short period of time, and that they purchased G shares by misunderstanding that G shares are sold in bulk during a short period of time.

9) Upon the conversion of preemptive rights identical to the preemptive rights offered as security into stocks and listing them on July 31, 2013 due to the application for provisional disposition of No. 200 and the suspension of purchase of stocks, No. 300 filed an application for provisional disposition against disposal of the stocks exercising the above preemptive rights. Defendant A and H did not pay a loss security amount for the purchase volume on July 30, 2013 to S and Defendant B.

No. 204, U.S., even though U.S. continued to sell shares until July 31, 2013, S and Defendant B did not purchase G shares any longer since July 31, 2013. Ultimately, on July 31, 2013, G G share price fell in KRW 2,810 (23), paper price 2,970) and maintained a similar level thereafter.

10) On August 10, 2013, BC, a former owner of H, R, I, S, Defendant B, and Defendant B, had settled the accounts of stock purchase and sale at the 805 AW office of Jung-gu Seoul, Jung-gu, Seoul, for the settlement of accounts.

BC, U’s employees, from July 29, 2013 to July 31, 2013, sold G shares 1,132,074 to July 31, 2013, and (24) H paid 256,367,886 won (=3,299,462,152 won -3,00,000 won - 43,094,266 won out of the leased principal and the amount of profit margin on preemptive rights to be borne by H, and 256,367,886 won (=3,29,462,152 won - 3,000,000 won - 43,094,266 won) as the settlement amount.

Since July 31, 2013, S and AB, even though all G shares purchased have been sold by G share price, they caused loss due to the decline in stock price and the non-payment of loss security. H concluded settlement with S by paying 180 million won out of the above settlement amount received from U to AB, and 64 million won to AB, respectively.

11) Whether Defendant A’s request for purchase of shares constitutes 25% of the fluctuation in market price

Defendant A concluded a share purchase agreement with S and Defendant B as seen earlier, and acknowledged that Defendant B had Defendant B purchase G 542,461 shares between July 29, 2013 and July 30, 2013, Defendant A asserts that it is merely merely a request made by G owners at the time of the purchase, and that it is irrelevant to artificial market manipulation.

However, around May 2013, G had been suffering from serious financial difficulties to transfer management rights to Defendant A, AH and A0, an external force, on condition of attracting funds, and even around July 2013, G seems to have no special circumstance to attract large-scale funds or a new business owner, etc.

Defendant A acquired the right of management of G around May 2013 and knew it well through the actual inspection. Under such circumstances, Defendant A’s unreasonable condition that Defendant A would guarantee the principal and interest of 3% from bond companies such as S and Defendant B through R, and that the amount of loss security equivalent to 12% or 15% of the purchase price of stocks should be paid (=S 1.20 million won + Defendant B.7 billion won) to purchase shares of G, rather than simply wanting to purchase shares in an opportunity to increase the price of G’s share price, it is reasonable to deem that Defendant A would have the purpose of stabilizing the price of the shares by providing that it would not decrease the price of G in spite of the mass sale of shares in U.S., to make unjust enrichment from the purchase price of the shares.

Furthermore, even from the perspective of S and B, even if the share price of G residing in the line of KRW 2,200 through KRW 2,400 has increased from July 22, 2013, it can be sufficiently known that the share price is likely to decrease at any time unless there is any particular reason for share price increase in the situation where G was known to a certain extent in the market. Although Defendant A agreed to guarantee the principal and interest rate of KRW 3% and to pay the share purchase price of KRW 12% through 15%, it is not easy to determine that Defendant A would believe only the above Defendant A’s promise without any prior security, but it is not easy to determine a large amount of investment. Nevertheless, Defendant B’s decision to purchase shares in the future would not fall from the share price increase in the future, and it appears that Defendant A would not have any artificial market price manipulation.

2. As to occupational embezzlement

A. Summary of the assertion

Defendant A received KRW 100 million from G to the account in the name of AI in a de facto marital relationship with Defendant A on September 6, 2013. However, since the said money was not known that it was G’s funds, Defendant A did not have any intent to commit embezzlement.

Defendant A had a creditor of Defendant A pay KRW 80 million to Defendant A on September 26, 2013. However, the said money was lent by AH to Defendant A to the creditor of Defendant A, and it is not G funds because AH borrowed money individually from AJ to Defendant A. Thus, Defendant A does not constitute embezzlement.

B. Determination

1) On September 6, 2013, part of KRW 100 million received with Al account

In full view of the following circumstances admitted by the evidence as seen earlier, it is reasonable to view that Defendant A was aware of the fact that the said money was 100 million won at the time of receiving KRW 100 million from AH’s account in the name of the AI and that AH withdrawn KRW 100 million from Company’s capital regardless of its business purpose and paid regardless of its business purpose. Accordingly, Defendant A’s assertion that there was no criminal intent of embezzlement is rejected.

① AH, around September 2013, on the ground that Defendant A was unable to attract funds from the outside and increased the company’s obligations, and Defendant A demanded that Defendant A go to the AI account to change KRW 100 million on the condition of leaving the company to AH. On September 5, 2013, AH transferred KRW 100 million out of KRW 99,00,000 of the subscription price for small amount of public offering capital stock, which was entered into the G account, to the AI account on September 6, 2013.

② At the end of September 2013, 2013, AH stated that the amount deposited in the company as a loan was KRW 400 million and transferred it to the AI account by withdrawing KRW 100 million among them. However, at the time of AH’s order, AH issued a direction to “N to treat the said KRW 100 million during its repayment,” and (32) as of September 6, 2013, AH did not have a claim for the said KRW 100 million against AH as of September 6, 2013.

③ Furthermore, if a company manager consumeds money owned by the company for personal purposes on the basis of the intent of unlawful acquisition, it constitutes an occupational embezzlement. In such a case, the mere fact that the company manager has a claim for provisional payment or personal claim against the company does not change (see, e.g., Supreme Court Decisions 2005Do5772, Jun. 1, 2007; 2010Do9627, Jul. 14, 2011). Even if AH had a claim for provisional payment or loan amount of KRW 400 million against G, it constitutes an occupational embezzlement to pay funds received by G, a listed corporation, to the Defendant regardless of the company’s business.

④ At the time of receiving KRW 100 million from AH in this court, Defendant A stated that at the time of receiving KRW 100 million from AH, A was aware of the fact that she withdrawn KRW 100 million of the company’s capital and paid it to assets. Defendant A knew of the source of the said capital.

2) The portion of KRW 80 million paid to AK on September 16, 2013

In full view of the following circumstances admitted by the evidence as seen earlier, it is reasonable to view that AH paid KRW 80 million to AK as a fund owned by G and Defendant A was aware of this. Accordingly, Defendant A’s assertion on this part is not acceptable.

① On September 16, 2013, AH offered promissory notes, etc. with a face value of KRW 400 million issued by G as security, and received KRW 400 million from AJ from AJ to the NA’s agricultural bank account. On the same day, AH withdrawn KRW 350 million out of the said money and paid KRW 80 million out to AK, a creditor of the Defendant.

② In light of the fact that AJ was a management manager of AH at the time of lending the above KRW 400 million, the collateral offered by AH is a promissory note, etc. issued by G, the account deposited in the loan of KRW 400 million is G account, and AHN paid KRW 80 million to AK after AH paid it with KRW 80 million, and that AK received a written confirmation from AK that he subrogated for the personal debt of Defendant A., the above KRW 80 million paid by AH to AK is not a personal asset of AH, but a fund owned by G.

Furthermore, in light of the fact that “A” requested at the prosecution to resolve the obligation to AK and the Defendant made a statement to resolve the said money with the money to the Defendant Company, and Defendant A knew that A would pay KRW 80 million to AK with the company’s funds, it is reasonable to view that Defendant A knew that A would have paid KRW 80 million with the company’s funds.

Reasons for sentencing

1. Defendant A

(a) The scope of the applicable sentences;

The imprisonment with prison labor for not less than one month but not more than fifteen years.

(b) Scope of recommendations based on the sentencing criteria;

1) Violation of the Financial Investment Services and Capital Markets Act

[Determination of Punishment] Securities Crimes, Crimes infringing on the fairness of the capital market (unpublished important information use, manipulation of market prices, illegal transactions) and Type 2 (10 million won to less than 500 million won)

【Special Convicted Person】

【Determination of Recommendation Area】 Basic Area

[Scope of Recommendation] Imprisonment with prison labor for not less than one year but not more than four years

2) Each crime of occupational embezzlement

[Determination of Punishment] Embezzlement and Breach of Trust, Type 2 (not less than KRW 100 million but less than KRW 500,000)

【Special Convicted Person】

【Determination of Recommendation Area】 Basic Area

[Scope of Recommendation] Imprisonment with prison labor for not less than one year but not more than four years

36) Imprisonment with prison labor for not less than one year and not more than five months;

(d) Determination of sentence;

Defendant A’s crime of price manipulation agreed with H to jointly manage the above company on the condition that Defendant A, et al. would attract large amount of funds, but, in collusion with H et al., would not have a way to attract funds from outside the company, G recovered preemptive rights offered as security from the bonds company and artificially converted the preemptive rights offered as security to the new stocks, and made profits equivalent to profits from the market by artificially supporting the stock price. Such market price manipulation is not only an act impairing trust in the stock market and undermining the sound development of the capital market, but also an unspecified number of general investors incur unexpected losses. Defendant A excluded from Defendant B, by purchasing stocks, paid loss security funds to the company, etc., but also participating in the sale of the stocks by designating the time and quantity of sale through I, thereby denying the overall market price manipulation in light of the fact that Defendant A, et al., who did not use the funds for the purpose of the crime without any reasonable distance from the company’s profits. Defendant A, et al., who did not directly use the funds for the purpose of the crime.

However, since Defendant A is not the owner of the preemptive right used for the manipulation, it is difficult to regard Defendant A as having directly engaged in unjust enrichment due to the manipulation, taking into account the favorable circumstances, such as the fact that there is no previous error with respect to the manipulation of market price into account to Defendant A. In addition, considering the age, occupation, family relationship, living environment of Defendant A, circumstances after the crime, and all other factors of sentencing specified in the trial process of this case, the punishment shall be determined as ordered

2. Defendant B

(a) The scope of the applicable sentences;

The imprisonment with prison labor for not less than one month but not more than ten years.

(b) Scope of recommendations based on the sentencing criteria;

[Special Convicts] Where the degree of commission of a crime is minor, 37) the actual share price has an impact on the actual share price. Where the scale of the act is small, 38)

【Decision on the Recommendation Area】 Special mitigation Area

[Scope of Recommendation] Imprisonment with prison labor for not less than five months but not more than two years and six months.

Defendant B’s crime was committed by Defendant A, taking part in Defendant A’s purchase force in the above market price manipulation crime and preventing the price decline in U’s large volume sale, thereby allowing Defendant A and H to obtain profits from the market price. The above market price manipulation is not only an act that damages trust in the stock market and undermining the sound development of the capital market, but also an act that causes unexpected damages to unspecified general investors.

However, the sentence shall be determined as ordered in consideration of the facts that Defendant B confessions all of the crimes and reflects them, the favorable circumstances that Defendant B did not have any previous record, and the overall sentencing factors of Defendant B’s age, occupation, family relationship, living environment, circumstances after the crime, and all other sentencing factors specified in the trial process of this case shall be comprehensively considered.

The acquittal portion

1. Summary of the facts charged

On August 9, 2013, the Defendant stated that BF representative director BG would pay KRW 1 billion by adding interest of KRW 10 billion to G within one month if BF representative director BF (hereinafter referred to as “BF”) as security at BF office located in Gangnam-gu Seoul Metropolitan Government (hereinafter referred to as “BF”).

However, in fact, at around July 5, 2013, K and L, holding the above corporate bonds, were extinguished by exercising the preemptive right to new shares, making a substitute payment as a stock subscription deposit, and therefore, G had no value as a collateral for retirement. At that time, G had no employee's benefit was paid at time due to its business depression, and at that time, G had no employee's benefit was paid at approximately KRW 5 billion due to the loan of funds from the bond business operator and did not have the ability to repay the loan of KRW 1 billion from BF even if it was borrowed from BF due to the fact that the foreign debt exceeds KRW 5 billion.

Nevertheless, the Defendant, as seen above, made a false statement as if the corporate bonds with preemptive rights offered to the above BG were normal bonds and there were sufficient means to repay G, thereby borrowing KRW 1 billion from BG on the same day.

2. Determination

In full view of the following circumstances admitted by the evidence as seen earlier, the evidence submitted by the prosecutor alone is insufficient to conclude that the Defendant’s act of providing BF with a corporate bonds that have no effect on BF as having been effective and the act of disposing of the BF lending KRW 1 billion to G, or that G had no intent and ability to repay the above loans at the time, and there is no other evidence to acknowledge otherwise.

① Around August 9, 2013, the Defendant borrowed KRW 1 billion from BF from G to offer as security the notarial deed of promissory note amounting to KRW 1.3 billion at the face value of G bonds with warrants and KRW 1.5 billion at the face value of G.

② On July 5, 2013, K and L used the preemptive right to new shares as a stock subscription deposit, and the claim was extinguished. Thus, the Defendant Company A was in custody for retirement according to the procedure. However, at the time of borrowing KRW 1 billion from BF, the Defendant Company A did not notify the BF as above.

③ BG’s representative director discussed at the prosecutor’s meeting of the board of directors at the time of lending KRW 1 billion to the board of directors at the time of the public prosecutor’s meeting, and stated that the bonds were recovered due to the acquisition of corporate bonds, and that only a promissory note was unable to be used as collateral. 39) However, in this court, BG’s aforementioned new shares as collateral did not have a significant meaning as collateral because of the separation of preemptive rights and distribution of new shares among them and the validity of bonds as collateral. The loan of this case was approved even if the certificate of promissory note was received only. At the above board of directors’ meeting, the fact that the said certificate of promissory note with KRW 1.5 billion merely stated that it was insufficient to say that the above certificate was insufficient to supplement the above statement at the public prosecutor’s office, and that it was difficult to view that there was a difference in the amount of KRW 1.5 billion by attending the public prosecutor’s office’s meeting and making a statement at the public prosecutor’s office’s meeting of KRW 1300,00,00,00.

④ Furthermore, I examine the intent and capacity of G’s intent to repay the said amount of KRW 1 billion to BF through G’s capital increase with respect to the said loan within one month after the loan. In light of the following: (a) around September 5, 2013, in which one month has not elapsed since the date of loan, the amount of KRW 1 billion was inflowd through a small amount of money increase in KRW 1 billion to G; and (b) immediately thereafter, it appears that other creditors who obtained company’ internal information could not make payment to GF from the wind of seizing most of the above amount of capital increase in capital increase; and (c) the mere fact that the above amount of debt with respect to GAF was not repaid, it is difficult to readily conclude that G had no intent to repay and ability to repay as at the time of loan.

3. Conclusion

If so, this part of the facts charged constitutes a case where there is no proof of crime, and thus, it is not guilty under the latter part of Article 325

It is so decided as per Disposition for the above reasons.

Judges

Freeboard of the presiding judge;

Judges Park Il-young

Judges Kim Gin-han

Note tin

(i)(average selling unit price of 3,188 - event price of 2,650 - X number of 49,502 shares;

(ii)(average selling unit price of 3,273 - event price of 2,650 Won) X-Number of 190,000 shares;

(iii)(average sale price of KRW 3,213 - Exercise price of KRW 2,650), X number of 170,000 shares (average sale price of KRW 3,136 - event price of KRW 2,650) X number of shares 160,009 shares

5) Of the above bonds with warrants, the conversion price per share is 2,650 won at the time of exercising the preemptive right.

6) N is, with the knowledge of U, an employee of SV (AW) AV (AW), 0 is the wife of AV, Q is the other bond company, Q is the person who works in the name of U and P as well as AV in the name bond office.

7) 1,132,074 x 2,650 x “2,99,996,100

8) This is the amount that does not exceed one billion won as the initially agreed loss security amount. U, however, did not take any particular measure after having already paid the loan of KRW 3 billion to H as the purchase price of new shares.

9) On July 5, 2013, H borrowed KRW 1 billion from AY to offered as security, the creditor of G bonds with debt amounting to KRW 2 billion, who had been offered as security, had N claimed early redemption of the said bonds, and received KRW 2 billion from G (the purchase price of new stocks paid by U is part of KRW 3 billion), and paid KRW 1 billion out of that amount to Y, and paid KRW 85 billion out of the remainder 1 billion as security for losses to U.S.

10) Since H holds 1,132,074 shares offered as security prior to the repayment of the above loan amount of KRW 3 billion to U, it is nothing more than that of the transfer of ownership.

11) This is the remainder remaining after deducting 650,000 shares of G owned by U from 1,132,074 shares of G owned by G, which are held in the name of G, which are held in the name of G,. U, while selling H M, in mind of an agreement with H to compel transfer of the shares by July 26, 2013, the date of closing the register of shareholders, it seems that U continued to hold the shares without selling the shares equivalent to 650,000 shares of H.

12) Seven pages of the examination of witness to U

13) Eight pages of the examination of witness to U

14) 8, 22, 15) 7, 22 (16) 23 pages of the examination of witness to U as to the examination of witness to U

17) Defendant A appears to have designated the time zone and volume to sell shares to U through each I in Korea on July 29, 2013 and July 30, 2013.

18) Unlike the fact that H made a lump sum payment to U as a loss security amount of KRW 850 million from the beginning, Defendant A agreed to pay 15% of the purchase price of shares as a loss security upon purchase of shares.

19) Five pages, six pages, one thousand to thirty-seven pages of the examination record of R.R.

20) Seven (7), two (2), three (3) pages of the protocol of examination of witnesses relating to R.

21) On July 29, 2013, Defendant A instructed R from Maka to purchase shares by telephone from Makao in China, and on July 30, 2013, Defendant A returned from the new wall to the new wall and had it together with R in Gangnam-gu Seoul, where Defendant A resided at the time, and it appears that Defendant A designated R at that time the time the time of purchase of shares and the volume of shares (the nine pages of the examination report on R).

22) Specific details of the conclusion are as shown in the annexed list of crimes.

23) This is the lower limit, which is the 15% decrease compared to the 3,305 won preceding the day.

24) According to the U’s statement, KRW 3,29,462,152 from July 17, 2013 to July 23, 2013: (a) from July 2013 to July 23, 2013, HMG shares were sold in advance; (b) from July 29, 2013 to July 31, 2013, the purchase and sale of G shares were repeated; and (c) the sale price was only based on the total of KRW 1,132,074 shares sold during the said period; and (d) the price acquired by selling KRW 1,132,074 shares during the actual period was calculated by deducting KRW 3,165,84,310 shares from the actual sales price, KRW 360,306,3705,740,3605,7416,307,764,757,764,750.

25) The term "trades that cause a fluctuation in the market price of securities or exchange-traded derivatives" under Article 176(2)(1) of the Financial Investment Services and Capital Markets Act.

26) At the time of this Court, H stated in G’s Mari (Mali) that at the time, G was awarded 2.4 billion won in postal network and that the satellite communications network was expected to be received as a exploitation project at the rate of 12 billion won in the Maliba (Zamba), but there was no data to confirm it.

27) The share purchase agreement entered into between Defendant A and Defendant B is basically a structure of purchasing shares on the account of S and Defendant B, and then recovering investments by selling them later, but on the other hand, Defendant A agreed to guarantee 3% of the principal and interest on the share purchase fund to S and Defendant B. As such, the nature of the above agreement is, in essence, similar to a loan agreement for consumption where Defendant A borrows the said share purchase fund as collateral for G stocks purchased by Defendant A and Defendant B. The title of the agreement entered into by Defendant A and S is “the agreement for stock security loan” can be understood in this context.

28) Unlike that H paid 850 million won as a lump sum to U, Defendant A agreed to pay 12% or 15% of the purchase price after purchasing shares to S and Defendant B, and Defendant A failed to pay the amount of loss security for the purchase price on July 31, 2013, and Defendant B immediately suspended the purchase of shares as seen earlier.

29) Two copies of investigation records 2358 pages, 2359 pages

30) Two copies of investigation records 2358 pages

(xxxii)10 pages, 11 pages of the examination of witnesses in respect of India;

32)xi (11) a protocol of examination of the witness in relation to N;

33) 18 pages of the Defendant Examination Protocol against Defendant A

34)six pages of the protocol of examination of the witness in relation to India, two ter-2,374 pages of the investigation records;

35) Two copies of investigation records 2,374 pages

36) 1/2 of the upper limit of the recommendation for each crime of occupational embezzlement is added to the upper limit of the recommendation for each crime of violation of the Financial Investment Services and Capital Markets Act, which is a basic crime (=4 years + 1 year and 6 months = 5 years)

37) Although Defendant B entered into a share purchase agreement with Defendant A and purchased shares through R and Securities Company employees, Defendant B appears to serve as the agent of AB, which is the main owner behind the agreement, since it did not engage in the aforementioned act with the money of assets. In the actual process of settlement, Defendant B, not Defendant B, received the settlement amount directly from H.

38) The volume purchased by Defendant B is merely 38% of the total volume purchased at the request of Defendant A with 207,461 shares, and the degree of contribution to the manipulation of market prices seems to be similar.

39) One copy of investigation records 1151 pages

40) Three pages of the examination of the witness to BG

41) Four pages of the examination of the witness to BG

42) 11 pages of the examination of witness in respect of BG