[1] Whether “a person who conducts short-term financial business without obtaining authorization from the Financial Services Commission” who is punished under Articles 360(1) and 444 subparag. 22 of the Financial Investment Services and Capital Markets Act includes an individual or company, other than a financial institution (affirmative)

[2] In a case where Defendant was prosecuted for violating the Financial Investment Services and Capital Markets Act by issuing and selling a large quantity of bills and engaging in short-term financing business without obtaining authorization from the Financial Services Commission, the case holding that, even if bills were issued without stating the issue date of bills, it constitutes “issuance of bills” under Article 360(1) of the Act, as long as the issuance date of bills was planned to be refused to pay and refuse payment within several months and the issuance date, etc. was issued with the name and seal of Defendant in blank, and as long as the payment was presented with face value supplement in the short-term period, it constitutes “issuance of bills”

[3] In order to recognize the criminal facts that a short-term financial business was conducted without obtaining authorization from the Financial Services Commission under Article 360(1) of the Financial Investment Services and Capital Markets Act, whether the pertinent bill must be identified as having arrived within one year (affirmative)

[1] In light of the contents of Articles 360(1) and (2) and 444 subparag. 22 of the Financial Investment Services and Capital Markets Act and Article 348(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, a financial institution with certain qualifications must obtain authorization from the Financial Services Commission in order to conduct short-term financial business as stipulated under Article 360(1) of the Financial Investment Services and Capital Markets Act. If a financial institution, whether an individual or company is not a financial institution, is engaged in short-term financial business without obtaining authorization from the Financial Services Commission, it shall be deemed that a financial institution is punished under Article 444 subparag. 22 of the Financial Investment Services

[2] In a case where Defendant was prosecuted for violation of the Financial Investment Services and Capital Markets Act by issuing and selling a large quantity of bills and engaging in short-term financial business without obtaining authorization from the Financial Services Commission, the case affirming the judgment below to the effect that, in light of the contents and purport of Article 360(1) of the Financial Investment Services and Capital Markets Act, the issuance of bills constitutes “issuance of bills” under Article 360(1) of the Financial Investment Services and Capital Markets Act as long as the issue date, face value, or maturity of some of the bills was made without stating the issue date, and the issuance date, etc. was issued in blank, and the so-called breabbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb

[3] “Short-term financing business” under Article 360(1) of the Financial Investment Services and Capital Markets Act refers to the issuance, discount, trade, brokerage, acceptance, and guarantee of bills, the maturity of which comes within one year. Thus, in order to find a criminal fact for which a short-term financing business was conducted without obtaining authorization from the Financial Services Commission, it is necessary to specify whether the pertinent bills are subject to the application of the Financial Investment Services and Capital Markets Act, by specifying whether the said bills have arrived within one year.

[1] Articles 360(1) and (2) and 444(2)2 of the Financial Investment Services and Capital Markets Act; Article 348(1) and (2) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act / [2] Articles 360(1) and 444(22) of the Financial Investment Services and Capital Markets Act / [3] Articles 360(1) and 444(22) of the Financial Investment Services and Capital Markets Act; Article 348(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act

[3] Supreme Court Decision 97Do1706 delivered on September 12, 1997 (Gong1997Ha, 3215)

Defendant

Defendant

Attorney Song-chul et al., Counsel for the defendant

Busan District Court Decision 2011No2926 Decided December 2, 2011

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

The grounds of appeal are examined.

1. Whether the Defendant issued and sold each of the Promissory Notes in this case

This part of the grounds of appeal is nothing more than misunderstanding the selection of evidence and fact-finding, which belong to the free trial of the lower court, and the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by exceeding the bounds of the principle of free evaluation of evidence, or failing to exhaust all necessary deliberations.

2. The meaning of “a person who conducts short-term financial business without obtaining authorization from the Financial Services Commission” who is punished by Article 444 subparag. 22 of the Financial Investment Services and Capital Markets Act (hereinafter “Capital Markets Act”).

Article 360(1) of the Financial Investment Services and Capital Markets Act provides that “A person who intends to engage in the business of issuing, discount, trading, brokerage, acceptance, and guarantee of bills whose maturity comes within the period prescribed by Presidential Decree and the business incidental thereto, which are prescribed by Presidential Decree (hereinafter referred to as “short-term financial business”) shall obtain authorization from the Financial Services Commission.” Article 360(2) of the said Act provides that “A person who intends to obtain authorization under paragraph (1) of the said Article shall be a bank or any other financial institution prescribed by Presidential Decree and shall have equity capital of at least 20 billion won.” Articles 44 subparag. 22 and 360(1) of the said Act provide that “The period prescribed by Presidential Decree” shall be one year. Article 348(1) of the Enforcement Decree of the said Act provides that “The period prescribed by Presidential Decree shall be one year.”

In light of the above provisions, in order to carry on a short-term financial business, a financial institution with certain qualifications must obtain authorization from the Financial Services Commission, and if it carries on a short-term financial business without obtaining authorization from the Financial Services Commission, whether it is an individual or company, it is reasonable to view that it is punished pursuant to Article 444 subparagraph 22

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as to the subject of violation of Article 360 (1) of the Capital Markets Act, as alleged in the

3. Whether Article 444 subparag. 22 and Article 360(1) of the Capital Markets Act are unconstitutional

This part of the ground of appeal is without merit, as it is alleged in the ground of appeal that the defendant did not consider it as the ground of appeal or that the court below did not consider it as an ex officio.

4. Whether each of the instant promissory notes constitutes a bill under Article 360(1) of the Capital Markets Act

(1) In light of the contents and purport of Article 360(1) of the Financial Investment Services and Capital Markets Act, even if some of the Promissory Notes in this case were issued without the issue date, face value, or maturity, it shall be deemed that the issuance of the Promissory Notes constitutes the “issuance of the Promissory Notes” under Article 360(1) of the Financial Investment Services and Capital Markets Act, even if the Promissory Notes in this case were issued without the issue date, and the issuance date, face value, or maturity, etc. is planned within several months from the issuance date of the Promissory Notes in blank, and the so-called B/L issued with the Defendant’s name and seal affixed to the Promissory Notes in blank, and as long as the payment was made with the face value or maturity indicated within the short period, it shall not be deemed that the issuance of the Promissory Notes in this case constitutes the “issuance of the Promissory Notes” under Article 360(1) of the

The judgment below to the same purport is just, and there is no error in the misapprehension of legal principles as to bills subject to the application of Article 360(1) of the Capital Markets Act, as alleged in the grounds of appeal.

(2) However, based on its adopted evidence, the lower court recognized the criminal facts of “the Defendant, from September 2009 to March 2010, issued a promissory note amounting to KRW 368 and the total face value of KRW 26,212,462,787, and sold via sales books to KRW 2,00,000 to KRW 3,000 per head, thereby engaging in short-term financing business without obtaining authorization from the Financial Services Commission,” and applied Articles 444 Subparag. 22 and 360(1) of the Capital Markets Act to this.

However, according to the above statutory provisions, the short-term financing business under Article 360(1) of the Capital Markets Act refers to the issuance, discount, trade, brokerage, acceptance, and guarantee of bills whose maturity comes within one year. Thus, in order to recognize a criminal fact that a short-term financing business was conducted without obtaining authorization from the Financial Services Commission, it is necessary to clarify whether each of the bills becomes subject to the application of the Capital Markets Act (see Supreme Court Decision 97Do1706, Sept. 12, 1997). However, since a promissory note issued by the defendant does not specify the facts constituting the above facts constituting the crime of the lower judgment and it cannot be deemed that each of the promissory notes issued by the defendant is a bill whose maturity comes within one year, it constitutes the elements of the crime that the defendant engaged in the short-term financing business.

The judgment of the court below is erroneous in the misapprehension of legal principles as to the specification of facts charged, or in the misapprehension of legal principles as to the subject of application of Article 360(1) of the Capital Markets Act, which affected the conclusion of the judgment.

The ground of appeal pointing this out is with merit.

5. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Chang-soo (Presiding Justice)