[1] The meaning of the securities business under Article 2 (8) of the Securities and Exchange Act and the standard for determining whether it constitutes the securities business

[2] Requirements for the sale and purchase business of securities and the acquisition business of securities

[3] Meaning of "matters belonging to the duties of officers and employees of the financial institution" under Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, and in case where a person who has been registered as a director of a corporation formally for the convenience of street activity receives money from the representative director of the corporation under the pretext of a request, whether it can be deemed as

[1] The Securities and Exchange Act aims to contribute to the development of the national economy by facilitating the circulation of securities through fair issuance, sale, purchase, sale and other transactions of securities and by protecting investors. The purpose of securities business under Article 2 (8) of the same Act is to arrange the sale and purchase of securities, commission, mediation or agent for trade, underwriting or agency for securities, underwriting or sale of securities, offering or selling securities in the securities market, the Association brokerage market, the Association brokerage market, or other foreign countries similar thereto, and the reason why the Securities and Exchange Act grants permission for securities business refers to the business, is to examine the identity, material and property requirements of the securities businessman in order to protect general investors and to supervise the observance of financial soundness and sound business order in order to contribute to the development of the national economy. In order to determine whether the securities business falls under the securities business, whether the securities business is issued and sold, whether the securities company participates in the sales team, whether the other party's subscription to purchase and sale, whether the other party's offering of securities is made or not, whether the other party's customer participate in the securities transaction or not.

[2] In the case of the securities sale and purchase business, repeated business activities conducted against unspecified general customers for profit is required, and in the case of the securities underwriting business, it cannot be conducted against the general customers on the basis of the relationship between the issuing company of securities and the underwriting company, and there is repeated acceptance of the securities as the market developer with physical facilities for profit.

[3] It is reasonable to interpret that matters belonging to the duties of officers and employees of the financial institution under Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes refer to all the cases or affairs of the person other than the person himself/herself. If a director of the company receives money from the representative director and requests a solicitation, and if the director seems to have managed the affairs as the representative of the company on behalf of the representative director of the company, he/she shall not be deemed to have made a solicitation for the case or affairs of another person. However, while the defendant was engaged in the business of the company on behalf of the representative director of the company on the pretext of solicitation while he/she received the money from the representative director of the company on the pretext of solicitation, he/she shall not be deemed to have been a defendant's own affairs, if he/she received the money on the pretext of solicitation

[1] Articles 2 (8), 28, and 208 (1) of the Securities and Exchange Act / [2] Article 2 (8) 1 and 5 of the Securities and Exchange Act / [3] Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes

[3] Supreme Court Decision 85Do2659 delivered on July 21, 1987 (Gong1987, 1423) Supreme Court Decision 94Do940 delivered on September 15, 1995 (Gong195, 3467)

Defendant 1 and one other

Defendants

Attorney Suspension-type et al.

Seoul High Court Decision 99No2837 delivered on December 29, 1999

All appeals are dismissed.

1. Judgment on Defendant 1’s grounds of appeal

The court below reasoned that the purpose of the Securities and Exchange Act is to facilitate the issuance, sale and purchase of securities and to protect investors by ensuring smooth circulation of securities and to contribute to the development of the national economy. The securities business provided for in Article 2 (8) of the same Act is brokerage, mediation or agent for sale and purchase of securities, underwriting, sale and purchase of securities by proxy, offering of public offering or sale in the securities market, the Association brokerage market, or similar foreign countries, and the reasons why the securities business is permitted under the Securities and Exchange Act are to protect general investors and to supervise whether the securities business complies with the financial soundness and sound business order. In order to determine whether the securities business falls under the above securities business, the court below erred by misapprehending the legal principles as to whether the securities company issued and sold securities for profit, whether the company will participate in the sale and purchase of securities, whether the company's offering of securities by itself, whether the company's offering of securities to acquire and sell securities, whether the company's offering of securities by itself constitutes an investment trust, or not, a series of securities investment trust's offering of securities to others.

2. Judgment on Defendant 2’s grounds of appeal

A. The court below acknowledged that Defendant 2 received KRW 50 million from Defendant 1 under the pretext of requesting that Defendant 2, the president of the Korea Guarantee Insurance Co., Ltd., provide guarantee for the corporate bonds underwritten by Nonindicted Co. 2 Co., Ltd. and Nonindicted Co. 1 Co., Ltd., and found Defendant 2 guilty on the ground that, even if Defendant 2 is the representative director of Nonindicted Co. 1, Defendant 2 should be deemed as mediation as long as he was requested by the above Defendant 1, the actual owner of Nonindicted Co. 1 Co. and Nonindicted Co. 2 Co. 1, and Defendant 1 would not provide KRW 50 million to Defendant 2 if he did not have any specific solicitation as seen earlier. Thus, Defendant 2 was guilty on the ground that there was a quid pro quo relationship between specific solicitation made to Defendant 2 and money and valuables provided KRW 50 million.

B. Matters belonging to the duties of officers and employees of financial institutions under Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes shall be interpreted to refer to all cases or affairs of the person other than the person himself/herself. If a director of the company receives money from the representative director and requests a solicitation, and if the director appears to have managed the affairs as the representative of the company on behalf of the representative director of the company, he/she shall not be deemed to have made a solicitation for the case or affairs of another person (see Supreme Court Decision 85Do2659 delivered on July 21, 1987). However, if the defendant was engaged in a non-act act in exchange for money from the representative director of the corporation on behalf of the representative director of the corporation for the convenience of its activities, if he/she received money in the form of a registration of the corporation without involvement at all in the company's ordinary affairs and received money for the solicitation, it shall not be deemed to have been a defendant's own affairs (see Supreme Court Decision 94Do940 delivered on September 15, 1995).

C. According to the evidence duly admitted by the court below, the contents of Defendant 2's solicitation in this case can be acknowledged that Defendant 1 actually managed by Defendant 2's Co., Ltd. and (ju) Non-Indicted 1 will purchase the corporate bonds in the future. Even if the above corporate bond guarantee business is not only an individual business of Defendant 1 but also an individual business of each of the above companies, Defendant 1 in this case was ordered to purchase KRW 50 million to Defendant 2 in the future, it is not related to the guarantee of the corporate bonds that only Non-Indicted 1 would be purchased in the future, but it is not related to (ju) Defendant 1, including Non-Indicted 2, to guarantee all the corporate bonds that he will purchase through each of the above companies (as a result of the record, the part of the corporate bonds guaranteed by Non-Indicted 2 in the name of the representative director of the company) and the above company's solicitation cannot be acknowledged as not impeding the above defendant 1's offering of the corporate bonds.

D. The above judgment of the court below is just in its result, and there is no error of misconception of facts or misapprehension of legal principles as alleged by the above defendant, and the above defendant's ground of appeal cannot be accepted

3. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Seo-sung (Presiding Justice)