Whether an internal trading using simple nonpublic information of registered corporations, which is not an Association-registered corporation (unregistered corporation) upon the amendment of Article 188-2 of the former Securities and Exchange Act, constitutes a case where punishment is abolished after the crime is committed (affirmative)

Although Article 18-2 of the former Securities and Exchange Act was amended by Act No. 5254 on January 13, 1997, the purport of the punishment of insider trading using undisclosed information of a company which did not reach an over-the-counter registered corporation or Association-registered corporation due to the completion of registration in the Korea Securities Dealers Association, is to be excluded from the punishment of insider trading using undisclosed information of a company which did not reach an over-the-counter registered corporation or Association-registered corporation through the securities market or Association brokerage market, unlike the case of a listed corporation or Association-registered corporation (over-the-counter registered corporation) where securities such as stocks are traded openly through the securities market or Association brokerage market, a simple registered corporation is not likely to cause any particular problem in terms of issuance and sale of securities, securing fairness and smooth circulation, or protecting investors, such a case shall be deemed to be an anti-sexual measure that

Article 1(2) of the Criminal Act, Article 188-2(1) and Article 208-2(6) of the former Securities and Exchange Act (amended by Act No. 5254 of January 13, 1997), Article 188-2(1) and Article 207-2 of the Securities and Exchange Act

Defendant 1 and two others

Prosecutor

Attorney Kim Young-sik et al.

Seoul District Court Decision 98No3312 delivered on August 27, 1998

The appeal is dismissed.

The grounds of appeal are examined.

1. Summary of the facts charged

As executive officers of Nonindicted Co. 1, the Defendants used them to subscribe for and distribute convertible bonds issued by Cmatia on November 9, 1996, using important information not disclosed to the general public known in connection with Citia’s business while promoting the registration of the Association brokerage market (registration in the open market) and the payment guarantee and intermediation of issuance of convertible bonds as requested by Citia semiconductor Co. 1, a registered corporation (hereinafter referred to as Citia).

2. Relevant regulations and amendments;

According to Article 18-2 of the former Securities and Exchange Act (amended by Act No. 524, Jan. 13, 197; hereinafter referred to as the "former Securities and Exchange Act"), the term "listed corporation" and "registered corporation" were newly established under Article 18-2 of the former Securities and Exchange Act (amended by Act No. 1440, Apr. 1, 197; hereinafter referred to as the "former Securities and Exchange Act") for the purpose of issuing its new and outstanding securities trading to the Association; and Article 18-2 of the former Securities and Exchange Act (amended by Act No. 1465, Apr. 2, 2006; hereinafter referred to as the "Association") were newly established under Article 7 of the former Securities and Exchange Act for the purpose of offering new and outstanding securities trading to the Association; and

3. Determination

According to the records, it can be seen that C&I became a registered corporation under the Securities and Exchange Act by registering C&I with the Securities Depository on October 23, 1996, and that C&I became an off-the-counter registered corporation by re-registration with the Korea Securities Dealers Association on March 15, 1997. Each act of the Defendants stated in the facts charged in this case was stipulated to be punished under subparagraph 6 of Article 208 and Article 188-2 (1) 4 and 5 of the former Securities and Exchange Act on November 9, 196, which is at the time of such act. However, the revised Securities and Exchange Act was amended to provide that C&I was punished under Article 208-2 (1) 6 of the former Securities and Exchange Act, although C&I still did not complete the registration with the Korea Securities Dealers Association but did not reach the time of the registration with the Association-registered corporation or Association-registered corporation, and thus, the Defendants' act was modified to not constitute an offense under the Securities and Exchange Act and Exchange Act, and Exchange Act, and its purport is unreasonable.

In this regard, the court below is deemed to have rendered a judgment of acquittal against each act of the Defendants as stated in the facts charged of this case, and there is no error of law by misunderstanding legal principles as alleged in the grounds of appeal.

4. Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating judges.

Justices Cho Cho-Un (Presiding Justice)