Defendant 1 and 8

Prosecutor and 7 others

Kim Jong-hee

Law Firm Barun, Attorneys Choi Young-ro et al.

Seoul Central District Court Decision 2010Gohap280, 282(combined) Decided September 3, 2010

Of the judgment of the court below, the part as to Defendant 1, 2 (Co-defendant 1 of the judgment of the court below), 3 (Co-defendant 2 of the judgment of the court below), 8, and 9 (Co-defendant 3 of the judgment of the court below) is reversed.

Defendant 1 shall be punished by imprisonment with prison labor for five years, by imprisonment with prison labor for three years, by imprisonment with prison labor for three years.

However, the execution of each sentence against the defendant 2 and 8 for five years from the date this judgment became final and conclusive, and against the defendant 3 for four years.

To order Defendant 3 to provide community service for 240 hours.

Defendant 9 shall be acquitted.

The Prosecutor’s appeal against Defendant 5, 6, and 7 Co., Ltd. (Defendant 2 of the Supreme Court judgment) and all appeals against Defendant 4, 5, and Defendant 7 are dismissed.

1. Summary of grounds for appeal;

A. Defendants

Defendant 1, 2, 8, and 9 appealed on the grounds of mistake of facts, misunderstanding of legal principles, and unreasonable sentencing. Defendant 4, 5, and Defendant 7 appealed on the grounds of unfair sentencing.

(b) Prosecutors;

The prosecutor appealed against Defendant 1 and Defendant 7 corporation on the ground of erroneous determination of facts and unfair sentencing, and appealed against Defendant 3, 5, and 6 on the ground of unfair sentencing.

2. Judgment on misconception of facts and misapprehension of legal principles

A. Defendant 1, 2

1) Of the embezzlement of KRW 16.618 billion against the victim non-indicted 1 corporation, as to the embezzlement of KRW 6,15,29 listed in [Attachment 1] attached to the lower court’s judgment

A) Defendant 1 and 2 asserted that Defendant 1 and 2 paid KRW 250 million, which was used as business expenses for Nonindicted Co. 5 Co. 6 Nos. 1 and 6 attached to the judgment below, as business expenses for Nonindicted Co. 1’s subsidiaries, for the purpose of supporting business expenses, do not constitute embezzlement.

In light of the evidence duly adopted and examined by the court below, the above Defendants deducted KRW 1.5 billion from the funds of Nonindicted Co. 5 around October 2008, and used the purchase of shares of Nonindicted Co. 1 and Nonindicted Co. 2 and the redemption of Nonindicted Co. 59’s securities loans, as stated in paragraphs 4 and 6.2 of the court below’s facts constituting the crime II and VI. However, the business expenses of Nonindicted Co. 5 were paid KRW 250 million to Nonindicted Co. 5, as seen above by the mother and child.

If so, the Defendants appear to use the money paid to Nonindicted Co. 5 as their own money for Nonindicted Co. 1 as necessary, and this constitutes sufficiently embezzlement.

B) The Defendants asserted that the funds used by Nonindicted 6 Company 1, as stated in No. 15 No. 15 of the victim’s list in the lower judgment, for the payment of capital increase with new stocks issued by Nonindicted 7 Company did not constitute embezzlement

According to the evidence duly adopted and examined by the court below, it is recognized that the amount of KRW 600 million of the funds of Nonindicted Co. 1 was used for Nonindicted Co. 6’s participation in the capital increase with Nonindicted Co. 7’s capital increase. However, according to the above evidence and Defendant 3’s statement at the trial court, Nonindicted Co. 6 or Nonindicted Co. 7 acquired Nonindicted Co. 7’s capital increase with 50% equity shares together with Nonindicted Co. 8, and Nonindicted Co. 1 acquired Nonindicted Co. 7’s capital increase with 50% equity shares with Nonindicted Co. 6’s capital increase with Nonindicted Co. 7’s capital increase with order to secure the shares. Thus, the above facts alone do not constitute embezzlement of the funds offered for capital increase with capital increase, and there is no other evidence to acknowledge this otherwise.

Therefore, the appeal by the defendant 1 and 2 pointed out this point is justified, and this part of the judgment of the court below is unfair.

C) Defendant 1 asserts that Defendant 1 cannot be held liable to Defendant 1 on the ground that he did not participate in the act because the crime of Defendant 1’s embezzlement by paying the acquisition fund to Nonindicted Co. 9 Co., Ltd. (hereinafter “Defendant 7”) that he acquired the set set of Defendant 7 Co., Ltd. listed in Nos. 1 29 attached to the lower judgment was locked.

In light of the aforementioned evidence, the Defendants already agreed to pay the acquisition price to Nonindicted Co. 9 when issuing a warranty to Nonindicted Co. 9, and it can be known that the Defendants paid the acquisition price to Nonindicted Co. 1’s funds according to this agreement. As such, Defendant 1 cannot be exempted from the liability solely on the ground that he was locked at the time of granting the acquisition price.

2) As to the assertion that there was no intention of unlawful acquisition since the repayment was completed

Defendant 1 and 2 asserted that the Defendants’ embezzlement funds listed in 1/2, 4, 7, 11, 13, 24, and 28 of the list of crimes attached to the judgment below against the Defendants and embezzlement funds listed in 1/2, 7, 11, 13, 24, and 28 of the judgment below, and the embezzlement funds listed in 2.3, 2.4 of the judgment below, and Defendant 2 of the judgment below: (a) all were repaid to the victims; and (b) some of the funds was repaid on the day or within a short period; and (c) since they were repaid in accordance with the repayment plan agreed from the victims, even if the Defendants received money from the victims and temporarily used money in another place, they cannot recognize the intent of unlawful acquisition.

In light of all circumstances, as the court below properly decided, the defendants can be found to have used the funds of the victims Nonindicted Co. 1 and 10 and Nonindicted Co. 5 as if they were owned by the defendants, taking into account the circumstances leading up to the use of the funds of the victims, the process, the frequency and amount of use of funds, whether they had gone through legitimate procedures at the time of withdrawal from the victims, the place of use of funds, the relationship between the defendants and the victims, etc.

B. Defendant 1

1) The portion of breach of trust pursuant to the monetary loan agreement concluded with Nonindicted 3 under the principal guarantee agreement

A) The Defendant, as indicated in the facts of the lower judgment IV. 1, asserts that the Defendant’s liability for Nonindicted Co. 7 with respect to Nonindicted Co. 3, as indicated in paragraph (1) of the lower judgment, was for Nonindicted Co. 7 to receive a share purchase fund from Nonindicted Co. 3 to secure the share of Nonindicted Co. 1 and to merge Nonindicted Co. 2, as the Defendant agreed to obtain an investment from Nonindicted Co. 11, Japan, thereby securing up to 30% of the share of Nonindicted Co. 1 and to merge Nonindicted Co. 2, and thus, it does not constitute a crime of breach of trust as it aims

However, according to the evidence duly adopted and examined by the court below, it is acknowledged that Defendant 7 had made an agreement as alleged by the defendant with Nonindicted Co. 11 on the condition that it issued 25 billion won of convertible bonds to Japanese Nonindicted Co. 11 and received the payment of the bond price. However, according to the above evidence, Defendant 7’s monetary loan agreement with Nonindicted Co. 3 entered into with Nonindicted Co. 11 on the condition that it would lend the purchase fund to Defendant 1 or Defendant 7 Co. 3 on the condition that Defendant 1 or Defendant 7 would purchase shares, and the principal and interest of the agreement would be settled within 3 months, as it appears in the agreement to lend funds to purchase shares in a short period, and eventually, the shares purchased by Nonindicted Co. 3 should be sold within a short period of time for settlement of the principal and interest, and thus, there appears to be a need for the Defendant to maintain the principal and interest of Nonindicted Co. 1 and Nonindicted Co. 2’s share purchase for the purpose of securing the shares of Nonindicted Co. 3’s investment. 2 and its own shares.

Therefore, since the above-mentioned form of share purchase through Nonindicted 3 does not seem to be necessary for the management of Defendant 7, the Defendant’s act of assuming the Defendant’s obligation to Defendant 7 with the risk of the share price decline by Nonindicted 1 and Nonindicted 2 Co. 3 constitutes a crime of breach of trust against Defendant 7.

B) The Defendant asserts that the monetary loan contract between Defendant 7 and Nonindicted 3 is a contract to lend funds to implement a crime such as price manipulation, and not only is an invalid contract falling under the social order under Article 103 of the Civil Act, but also the Defendant concluded this contract by abusing the power of representation, and even Nonindicted 3 was aware of this in this respect, this contract is null and void, and thus, it does not cause any loss to Defendant 7 corporation, and thus, the crime of breach of trust is not established.

On the other hand, it cannot be concluded that the monetary loan contract between Defendant 7 Co., Ltd. and Nonindicted 3 is null and void merely because the funds provided by Nonindicted 3 under the agreement guaranteeing the principal and interest, as seen earlier, were used in the share price management. It is not sufficient evidence to find that the Defendant abused the power of representation and knew that Nonindicted 3 knew of the abuse of power of representation. In addition, it is clear that the monetary loan contract is null and void under the monetary loan contract, regardless of whether it is valid under the civil law, there is a risk of economic damage due to the interest burden or price decline

C) Meanwhile, as seen earlier, the fact that the crime of breach of trust was established by Defendant 7’s having Defendant 7 Co., Ltd. bear the obligation against Nonindicted 3, and according to the aforementioned evidence, the monetary loan agreement between Defendant 7 Co., Ltd. and Nonindicted 3 can be acknowledged to have been concluded on seven occasions. As such, the crime of breach of trust is established on a comprehensive basis. According to the agreement between the Defendant and Nonindicted 3, Nonindicted 3, not by paying a loan in reality but by purchasing stocks as security for cash security, secured a purchase of stocks, and settled the principal and interest at maturity. As such, it is reasonable to deem that the actual profit that Nonindicted 3 gains pursuant to the above agreement, which is the Defendant’s breach of trust, is the balance after deducting the disposal amount of cash and purchased stocks from the principal and interest of loan. Accordingly, the amount of profit acquired by Nonindicted 3 should be deemed the amount that Defendant 7 Co. 3 should pay to Nonindicted 3 according to the settlement

According to the evidence duly adopted and investigated by the court below, the settlement pursuant to the loan agreement for consumption was replaced by the four-time monetary loan agreement. In the five-time settlement pursuant to the loan agreement for consumption, Defendant 7 Co., Ltd. paid KRW 582,948,894 to Nonindicted 3, KRW 472,039,041, KRW 107,915,922, and KRW 317,706,346, respectively from the settlement pursuant to the loan agreement for consumption, and KRW 317,706,346, respectively, from the settlement pursuant to the six-time loan agreement for consumption, Nonindicted Co. 3 was compensated by the Defendant 7 Co. 3 for losses caused by the share price decline, and eventually, the amount of profit acquired by Nonindicted Co. 3 is KRW 1,480,610,203 in total.

On the contrary, the lower court’s judgment that the amount of profit acquired by Nonindicted 3 is KRW 54.27 billion, which is the sum of the notarial amounts in each written agreement for loans for consumption, 7 times more than 7 times, is unfair in its conclusion. Therefore, the Defendant’s appeal pointing this out is with merit.

2) The part concerning embezzlement related to the sales proceeds of Nonindicted Co. 12 Company B

The Defendant asserts that, at the time of acquiring Nonindicted Co. 2, the amount of KRW 1.2 billion was insufficient, when Nonindicted Co. 2 took over the acquisition price of Nonindicted Co. 2, the amount of KRW 1.2 billion was returned once again to Nonindicted Co. 2, which was paid to Nonindicted Co. 13 in acquiring CB issued by Nonindicted Co. 13, and resolved by paying the acquisition price to Nonindicted Co. 13, which was returned to Nonindicted Co. 2, the Defendant’s return the price to Nonindicted Co. 13, as indicated in Section IV. 2 of the judgment of the lower court, the Defendant sold Nonindicted Co. 12 BW held by Defendant Co. 13, as indicated in Section IV. 2 of the judgment of the lower court, and paid the price to Nonindicted Co. 12, Ltd., which was ultimately paid to Nonindicted Co. 13, the Defendant did not embezzled the acquisition price of Nonindicted Co. 2, which he had to have

In light of the above evidence, the defendant's statement and the witness's statement that correspond to the fact that the defendant 7 corporation sold BW to the non-indicted 4 corporation is the most likely fact that the defendant 7 corporation lent it to the non-indicted 4 corporation. However, if the non-indicted 7 corporation acquired the non-indicted 2 corporation and the non-indicted 12 corporation still remains in the account record, or at least the non-indicted 12 corporation lent it to the non-indicted 4 corporation, there was no need to pretend that the non-indicted 7 corporation lent it to the non-indicted 4 corporation at least, and there was no reason to assume responsibility for the acquisition price without accounting, considering the fact that the non-indicted 2 corporation was not in the process of acquiring the non-indicted 7 corporation, it is difficult to easily believe that the non-indicted 14's statement and the non-indicted 14's statement that correspond to the fact that the non-indicted 2 corporation

3) The embezzlement of capital increase for new shares issued by Nonindicted Co. 15

Defendant 7’s lending the name of Nonindicted Co. 16 to Nonindicted Co. 15, and the Defendant did not embezzled the subscription price for new shares.

On the other hand, although the securities account in the name of Nonindicted 16, which was issued with capital increase, was kept in Defendant 7’s custody at the time of the lower court’s proper determination, there was no evidence to acknowledge that there was a need or reason for management to participate in capital increase with capital increase, and thus, Defendant 7’s securities account was kept in Defendant 7’s custody in Nonindicted 16’s capital increase with capital increase, it cannot be deemed that Defendant 7 Company participated in capital increase with capital increase.

4) Violation of the Securities and Exchange Act

A) The part that conspired with Nonindicted 3 to trade in a stock market

According to the evidence duly admitted and examined by the court below, Nonindicted 3 lent shares to the Defendant on seven occasions as seen earlier, and purchased shares in proportion to the amount of the loan, and during that period, the Defendant also purchased shares at the securities account managed by him, and the fact that a share sales contract was concluded several times between the two parties. However, in order to establish a conspiracy, it is insufficient to acknowledge that the Defendant and Nonindicted 3 entered into a transaction by exchanging the opinions on the quantity of shares sold, time of the sale, and the amount of the purchase and sale, and there is no other evidence to acknowledge it. However, since Nonindicted 3 continued to purchase a certain amount of shares in accordance with the contract with the Defendant, it is merely merely that the transaction was concluded by Defendant 1’s order of sale.

B) Facts of fraudulent fraudulent transactions

Defendant 1 asserts that there was no fraudulent transaction in the stock market in collusion with Nonindicted 3.

We examined this part of the judgment below in detail. In order to prevent the stock price decline or the stock price support in order to prevent the purchase of the company's own financial services and the stock as collateral, Defendant 1 needs to purchase shares in response to such needs of the defendant, and Nonindicted 3 was able to purchase shares in response to the defendant's needs, so that the purchase of shares, such as purchase of shares, can be done without bearing risks arising from the stock transaction. Accordingly, the defendant is able to purchase shares of a large amount of company or issue shares with capital increase, which is low in avoiding restrictions on the purchase of shares by subsidiaries and avoid the duty of disclosure following the acquisition of shares by large shareholders. Although the company's acquisition of shares or acquisition of shares by a large shareholder, it was able to manage the share price by making a third party's funds normally, or a foreigner's investment in the stock market, thereby impairing the fair competition in the capital market by causing investors to make a wrong judgment in the stock market, thereby impairing the fairness and efficiency of the capital market and causing damage to the bona fide investors in the capital market.

Therefore, this part of the defendant's assertion is without merit.

5) The part concerning embezzlement of KRW 1.1 billion from the loan of Nonindicted Co. 18 Co., Ltd. to Nonindicted Co. 17 and the part concerning embezzlement of KRW 3 billion from the agreement not to exercise preemptive rights

Defendant 1 knew that Nonindicted Co. 17 had delivered KRW 1.1 billion to Nonindicted Co. 18 through normal procedures, and provided Nonindicted Co. 19’s shares to Nonindicted Co. 17 as collateral, and Defendant did not have any intention to obtain illegal acquisition of KRW 1.1 billion. Defendant 1 introduced Nonindicted Co. 20 to Defendant 8 on the part of embezzlement of KRW 3.1 billion due to the non-exercise of preemptive rights, and Defendant 1 did not participate in the non-exercise of preemptive rights.

The court below determined this argument in detail. In light of all the circumstances acknowledged by the record, including the fact that Defendant 1 embezzled KRW 1 billion of the funds of Nonindicted Co. 1 in acquiring Nonindicted Co. 17 and paid the money as part of the acquisition price to Nonindicted Co. 21, and immediately was aware of the fact that the money was returned from Nonindicted Co. 17, and that the above KRW 3 billion was used to repay the money borrowed when Defendant 1 acquired Nonindicted Co. 17, the judgment below is just and there is no reason for the Defendant’s appeal.

B. Defendant 8

1) The portion of the embezzlement of Nonindicted Co. 17 by offering Nonindicted Co. 22 the share certificates of Nonindicted Co. 22, owned by Nonindicted Co. 17, as collateral to Nonindicted Co. 23 when taking over Nonindicted Co. 17

Defendant 8 asserts that he was only involved in the process of acquiring Nonindicted Co. 17 and did not have the status of custody of Nonindicted Co. 22’s share certificates, and that he was unaware of whether Defendant 1 provided this share certificates as security.

In light of the records, the judgment of the court below is just and the above defendant's assertion is without merit, since it is sufficiently recognized that defendant 8, defendant 1, and co-defendant 10 of the court of first instance borrowed money from non-indicted 23 and offered the above share certificates as security while taking over the non-indicted 17 corporation.

Defendant 8 asserts that the acquisition of Nonindicted Co. 17 is by the so-called LBO method, and that the crime of embezzlement is not established, aside from the fact that the defendant's breach of trust is established.

In addition, the defendant's assertion is without merit since the underwriting contract for the non-indicted 17 corporation of this case cannot be deemed to be an underwriting contract by normal LBO method, and it cannot be deemed that the embezzlement is not established on the ground that it is an underwriting contract by LBO method, and as seen earlier, the status of the co-defendant 10 of the first instance court as to the defendant, the defendant, and the non-indicted 17 corporation is sufficiently recognized.

2) The part concerning embezzlement of KRW 1.1 billion for lending Nonindicted Co. 18

Defendant 8 asserts that since the general meeting of shareholders of Nonindicted Co. 22 opened on March 24, 2009, Defendant 8 excluded from the management right for Nonindicted Co. 17, which was held after March 24, 2009, Defendant 8’s embezzlement of KRW 1.1 billion, which was held on March 26, 2009, Defendant 8 cannot be held liable for the above Defendant.

However, in light of the fact that Co-defendant 8, 1, and 10 of the first instance trial that the lower court properly determined, the lower court first paid KRW 1 billion to Nonindicted Co. 21 with the funds of Nonindicted Co. 1 and agreed to return the funds of Nonindicted Co. 17 with the funds of Nonindicted Co. 17, it is sufficiently recognized criminal facts.

3) The part concerning the transfer of Nonindicted Co. 17, which embezzled by offering a security for Nonindicted Co. 22’s share certificates.

Defendant 8 asserts that he was entrusted with the business of transferring Nonindicted Co. 17 to Nonindicted Co. 24, and only confirmed the share certificates of Nonindicted Co. 22, a real asset owned by Nonindicted Co. 17, to Nonindicted Co. 24, and that there was no agreement that Nonindicted Co. 24 would offer the share certificates of Nonindicted Co. 22 as security in lending money from the bondholder.

In light of the evidence duly adopted and examined by the court below, it is justified in the judgment of the court below that found that the defendant 8 cooperates in offering the share certificates of the non-indicted 22 corporation as collateral when the acquirer of the non-indicted 17 corporation borrows money from the bonds company by the non-indicted 24.

4) The portion that Co-defendant 10 of the first instance court lent 6 billion won in money of 2.5 billion won to Co-defendant 10 of the first instance court and the portion that embezzled 6 billion won in money of 25 billion won in capital increase for new stocks

Defendant 8 asserts that, according to the orders of Defendant 2, Defendant 8 paid the acquisition price in order to acquire Nonindicted Co. 26 operated by Defendant 10 in the first instance trial, and that the amount of KRW 6 billion was paid to Nonindicted Co. 23. However, Defendant 8 asserted that the said amount was only in depth and was not aware of being paid for capital increase with capital increase for new shares issued by Nonindicted Co. 25.

In light of the records, the judgment of the court below is just and the defendant's assertion is without merit.

C. Defendant 9

The summary of the charge against Defendant 9’s violation of the Commercial Act and the charge of false entry and exercise of public electronic records, etc. is that “Defendant 9 conspired with Defendant 8, Defendant 10 and Nonindicted 22 to pretend to pay capital for capital for capital increase with respect to capital increase for capital increase for capital increase. Defendant 9 lent KRW 7 billion to Defendant 8, Defendant 8, and Defendant 8 and Nonindicted 10 deposited money for capital increase for capital increase in the name of six persons, including Nonindicted 18, etc., and Defendant 8 and Nonindicted 10 of the first instance court pretended to pay for capital increase in the name of six persons, including Defendant 18, etc., after registering the change of the total number of issued capital after obtaining a payment for capital increase in the cashier’s checks.

The crime of provisional payment under Article 628 of the Commercial Act is established when the company's promoters, managing members, directors, audit committee members, auditors or acting directors under Article 386(2), 407(1), 415 or 567 of the Commercial Act, manager or other employees entrusted with a certain type of business or specific matters are the most desirable payment.

However, Defendant 9 is not in the above position at Nonindicted Co. 22, as well as Defendant 8 and Co. 10 of the first instance trial did not induce criminal intent to make the most payment, but merely lent the price to Defendant 8 and Co. 10 of the first instance trial, who had been willing to make the most advanced payment. Although Defendant 8 was found to have received securities accounts by accompanying to Defendant 8 when paying the price for capital increase to a securities company in KRW 7 billion, it seems that it was a measure for a definite recovery of loan, it was merely a measure to take, and as long as it cannot be recognized that Defendant 9 took another active action with Defendant 8 and Co. 10 of the first instance trial, Defendant 9 was aware that Defendant 8 and Co. 10 of the fact that he borrowed money to Defendant 8 and Co. 10 of the first instance trial with intent to make the payment, there is no evidence to prove the facts charged against Defendant 9 as a joint crime of payment.

Furthermore, it cannot be deemed that Defendant 9, who was merely lent the payment amount for the crime of false entry and exercise of public electronic records due to the application for registration of capital increase after the payment deadline, had functional control over the act of filing an application for registration, and there is no other evidence to acknowledge it.

Defendant 9’s appeal pointing this out is with merit, and this part of the judgment below is unfair.

D. Prosecutor's assertion of mistake against Defendant 1 and Defendant 7 corporation

The prosecutor asserts that Defendant 1 acquired unjust enrichment of the amount equivalent to KRW 3.5 billion due to market price manipulation for shares.

In light of the fact that it is difficult to readily conclude that the profits from the account in the name of Nonindicted Co. 4 were accrued to Nonindicted Co. 4 in detail due to market price manipulation and that it cannot be deemed that Defendant 1 acquired them, and that the stocks were acquired or disposed of as of the date on which the stocks were deposited or released, solely on the ground that the stocks were actually stored and released from each securities account, the evidence submitted by the prosecutor alone is insufficient to recognize that the Defendant obtained the profits of KRW 3.518 billion through market price manipulation, and that there is no other evidence to acknowledge this otherwise.

3. Determination on the grounds of unfair sentencing by the prosecutor and the Defendants

The prosecutor asserts that the sentence of the court below on Defendant 1 (7 years of imprisonment), Defendant 3 (4 years of suspended sentence for three years of imprisonment), Defendant 5 (2 years of suspended sentence for one year of imprisonment), Defendant 6 (1 year of imprisonment), and Defendant 7 stock companies (500 million won of fine) is too unreasonable and unfair. The prosecutor asserts that the sentence of the court below on Defendant 1, 2 (4 years of imprisonment), Defendant 4 (3 years of suspended sentence for one year of imprisonment), Defendant 5, Defendant 5, Defendant 7, Defendant 8 (5 years of suspended sentence for five years of imprisonment), and Defendant 9 (2 years of suspended sentence for one year of imprisonment) is too unreasonable.

A. Defendant 1

Defendant 1, via Defendant 7, took over the company through Nonindicted Co. 1 and Nonindicted Co. 2 for the purpose of strengthening dominance over the company and establishing a securities company, conducted capital increase with the purpose of guaranteeing the principal and interest of the company, conducted capital increase under the guarantee of the company’s capital, received loans from each subsidiary as collateral, used the company’s assets indiscreetly in order to prevent the transfer of the company’s funds, and provided the company’s assets as collateral to secure new funds, thereby causing the company’s insolvency. In addition, in order to prevent the trade of the collateral stocks due to the decline of the company’s stock price and the demand of investors to guarantee the principal and interest of the company, the company’s stock price manipulation on the stocks of Nonindicted Co. 1 and Nonindicted Co. 2 was set aside for a long period of time, and used the funds of the company concerned indiscreetly from the market price manipulation funds. The act of the Defendant was found to have

However, it is recognized that Defendant 1’s considerable portion of the amount embezzled by Nonindicted Co. 1, Nonindicted Co. 10, Nonindicted Co. 5, and Defendant 7’s embezzlement is either repaid or deemed to have been recovered. In relation to Nonindicted Co. 3, as seen earlier, the amount actually damaged to Defendant 7 Co. 3 is 1.4 billion won, as seen earlier, Defendant 1 appears to have no profit gained by himself from such crime, and there is no particular criminal record other than the fine for a drunk driving, and that Defendant 1 has a depth of personality.

In addition, considering all the circumstances shown in the oral argument, the lower court's punishment against Defendant 1 seems to be unreasonable.

B. Defendant 2

Defendant 2 has a substantial control over Nonindicted Co. 1 and its related companies, and without Defendant 2’s approval and implied consent, Defendant 1, 3, 8, etc. cannot prevent the crime as indicated in the judgment.

However, Defendant 2 did not seem to have actively participated in each crime; most of the shares held by Defendant 2 were offered as a security for the financing of the company; most of the shares lost assets due to this case; lost management rights for Nonindicted Co. 1, which he generated and operated for a long time; lost the age and health status; there is no benefit obtained by himself from the crime of this case; and Defendant 2 was tried and detained until the same case. In light of the above, the sentence of the lower court against Defendant 2 is unreasonable.

C. Defendant 3

Defendant 3’s overall management of the funds of Nonindicted Co. 1 and its subsidiaries led to the outflow of funds, and the amount is equal to the amount, and Defendant 1’s participation in the manipulation of stock prices, etc., the nature and circumstances of the crime are not easy.

However, in full view of all the circumstances revealed in the pleadings, including the following: Defendant 2 and Defendant 1, an operator of Nonindicted Co. 1, was involved in the instant crime, and Defendant 3 was involved in the instant crime, the lower court’s sentence against Defendant 3 is unjustifiable and unreasonable.

D. Defendant 4

Defendant 4, as a counselor working for a securities company without any power, was involved in the manipulation of stock price of this case in accordance with the direction and request of Defendant 1, a customer, and did not obtain any benefit other than the commission for stock transaction; Defendant 4 divided his error and made efforts for the company in good faith by taking office for the representative director of Nonindicted Co. 2; and Nonindicted Co. 11, a major shareholder of Nonindicted Co. 2, seeking action.

However, the instant stock market price manipulation is not only likely to undermine the development of the national economy by hindering the fair formation of prices in connection with the supply and demand in the stock market, hindering the fostering and development of the sound stock market, thereby making it difficult for companies to raise funds, but also causing unexpected damages to unspecified general investors participating in the stock transaction, thereby hindering the fairness, reliability, and efficiency of the capital market. In addition, Defendant 4 is more criticized as an expert engaged in the securities business.

Considering these various circumstances, the sentence of the lower court is unreasonable.

E. Defendant 5

As seen earlier, in light of the harm and harm of market price manipulation, Defendant 5’s act is also not suitable for that crime. In addition, Defendant 5 is not only an expert engaged in securities business but also an expert who does not bear any risk of market price manipulation but also has more risk of market price manipulation and less interest on the investment amount which was promised.

However, considering the circumstances revealed in the pleadings, such as the fact that there is no criminal power, Defendant was involved in the instant crime at Defendant 1’s request, and that it cannot be seen as an act of purchasing individual shares to raise the market price, etc., the lower court’s punishment against Defendant 5 against Defendant 5 is heavy or it cannot be deemed unfair.

F. Defendants 6 and 7 corporation

In full view of the circumstances revealed in the pleadings, such as the background, process, and profits acquired by the Defendants, the lower court’s punishment against Defendant 6 is not deemed unreasonable, and the lower court’s punishment against Defendant 7 corporation is heavy or uneasible. It does not seem that the lower court’s punishment against Defendant 7 corporation is unreasonable.

G. Defendant 8

The sum of the amount of profit resulting from Defendant 8’s embezzlement and breach of trust was large, and the acquisition and sale process of Nonindicted Company 17 led to the bankruptcy status of the company by providing the assets of Nonindicted Company 17 as collateral, and the funds of Nonindicted Company 25 were leaked due to loan, etc. without undergoing a normal procedure, and the nature and circumstances of the crime are not good.

However, although Defendant 8 appears to have actively engaged in the acquisition and sale of Nonindicted Co. 17 and management of Nonindicted Co. 25 with considerable authority, it appears that Defendant 2 independently from Defendant 2 did not appear to have independently participated in the purchase and sale of Nonindicted Co. 17 and the operation of Nonindicted Co. 25, and that Defendant 8 committed each crime under the direction and implied consent of Defendant 2 and Defendant 1, each of the crimes in the holding seems to have been committed. The profits acquired by Defendant 8 on his own by each of the crimes in the holding seems to be nonexistent. In relation to the acquisition of Nonindicted Co. 17 Co. 17, the circumstances in which Nonindicted Co. 22 offered the share certificates as security, and the profits from each embezzlement and the crime of breach of trust with Nonindicted Co. 17 Co. 2 and 1 belong to ○○○○○○○ Group operated by Nonindicted Co. 25, and Nonindicted Co. 100,000 won was returned to Nonindicted Co. 25, with respect to the funds for operation of Nonindicted Co. 25.

Thus, Defendant 8 embezzled money up to a considerable amount of money from the front of each of the instant crimes, and inflicted damages on the victim companies, but eventually, Defendant 8 was not involved in the acquisition or operation of Nonindicted Company 25 or Nonindicted Company 17 without the funds of ○○○○○ Group. In light of the above, Defendant 8 appears to have committed the instant crime in accordance with the orders of Defendant 2 and Defendant 1, on the whole, in light of the fact that Defendant 8 was not involved in the acquisition or operation of Nonindicted Company 25 or Nonindicted Company 17.

In full view of all these circumstances, the lower court's punishment against Defendant 8 seems to be unreasonable.

4. Conclusion

Therefore, since Defendant 1 and 2’s assertion of partial mistake of facts, misapprehension of legal principles, Defendant 8’s assertion of unreasonable sentencing, Defendant 9’s assertion of unfair sentencing, and Defendant 9’s assertion of mistake of facts and misapprehension of legal principles, each of the judgment of the court below is reversed pursuant to Article 364(6) of the Criminal Procedure Act, and Defendant 3 was prosecuted as Defendant 1, 2, and co-offender with regard to the facts constituting an offense listed in No. 15 of the annexed Table 1 of the court below’s judgment, which was recognized as reasonable and reasonable, pursuant to Article 364(2) of the Criminal Procedure Act, the part against Defendant 3 among the judgment of the court below against Defendant 1, 2, and the prosecutor’s appeal is reversed ex officio, and the remaining Defendants and the prosecutor’s appeal are dismissed, respectively, pursuant to

Defendant 1, 2, 3, and 8 take the gist of the facts constituting an offense and the evidence thereof recognized by this court against the defendant 1, 2, 3, and 8 as "total 29 billion won" with "total 16.6 billion won over 29 times" with "total 1.6 billion won" with "total 16.18 billion won" with "(6) after the 18th (7) "(7)" with "total 54.2 billion won" with "total 1,480,610, 203 won" with "total 1,60 billion won" with "3.5 billion won" with "3 billion won" with "3.5 billion won" with "the embezzlement of the victim 7 billion won related to the sale price of the non-indicted 12 BW Co., Ltd. 3. 9" with "the embezzlement of the fund of the non-indicted 15.1.5 billion won" with "the list 2.5 billion won" with "the list 31.4.5 billion won"

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

A. Defendant 1

Article 3(1)1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 356, Article 35(1) and Article 30 of the Criminal Act [2010 Ma280 Ma281], Article 2.b. (1) and Article 5.2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 4 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 8(2)1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 5(2)1 of the Act on the Aggravated Punishment, etc. of Officers, Article 30 of the Act on the Aggravated Punishment, Article 40 of the Act on the Aggravated Punishment, Article 5(2)2 of the Act on the Aggravated Punishment, Article 50 of the Act (2)

B. Defendant 2

Article 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 356 and 355 (1) of the Criminal Act, Article 30 of the Criminal Act [Article 3 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 3 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 356, Article 355 (1), and Article 30 of the Criminal Act [Article 3 (2) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 3 (4), Article 355 (1) and (3) of the Criminal Act [Article 3 (1) 1 of the Criminal Act, Article 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 3 (1), Article 356 (1), and Article 35 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 35 (30) of the Criminal Act]

C. Defendant 3

Article 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 356, 355 (1), and 30 of the Criminal Act [Article 2-1, Article 55 (1), and Article 30 of the Criminal Act], Article 3 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 356, Article 355 (1), and Article 30 of the Criminal Act / [Article 356, Article 355 (1), and Article 30 of the Criminal Act / [Article II-2 of the above crime, Article II-3, Article 5-4, Article 5-2 (1), Article 30 of the Criminal Act, Article 3 (1) 1, Article 356, Article 35 (1), and Article 35-2 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 8-2 (2) of the Criminal Act], Article 30 of the former Securities and Exchange Act

I. Defendant 8

Article 3(1)1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Articles 356 and 35(1) of the Criminal Act, Article 30 of the Criminal Act / [2010 high Gohap 282.2.b. (1), 2.b. (2), (3), (4), and (5) occupational embezzlement (generalization), 3. 5.b. occupational embezzlement, 3. 5.(b) choice of limited term, 356, 355(1), and 30 of the Criminal Act / [2] Articles 3(1)2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, 30 of the Criminal Act / [2] Article 20 of the Criminal Act, Article 3(1)1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 20 of the Criminal Act, Article 3(2)1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, Article 356(2) of the Criminal Act

4. Aggravation for concurrent crimes; and

Defendant 1, 2, 3, and 8: The former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act [Defendant 1] shall be punished against Defendant 1, among concurrent crimes with punishment prescribed in the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) of the same Act, Article 38(1)2, and Article 50 of the Criminal Act (Article 2-1 of the same Act, Article 50 of the same Act, among concurrent crimes with punishment prescribed in the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement), Article 2-1 of the same Act, Article 50 of the same Act, among concurrent crimes with punishment prescribed in the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement), Article 37 of the same Act, Article 38(1)2 of the same Act, and Article 2-1 of the same Act, Article 2-1 of the same Act, Article 282 of the Act (Embezzlement)

5. Discretionary mitigation;

Defendant 2, 3, and 8: Articles 53 and 55(1)3 of the Criminal Act (The favorable circumstances in determining unfair sentencing in the market)

7. Suspension of execution;

Defendant 2, 3, and 8: Article 62(1) of each Criminal Act ( considered as favorable circumstances in determining unfair sentencing at the time of sale)

8. Social service order;

Defendant 3: Article 62-2(1) of the Criminal Act

1. Defendant 1, 2, and 3

A. Summary of the facts charged

1) While Defendant 1, 2, and 3 conspiredd to keep KRW 600 million in custody for the victim Nonindicted Co. 1, Defendant 1, 2, and 3, Defendant 6, on May 6, 2009, embezzled the payment for capital increase with respect to capital increase for new shares issued by Nonindicted Co. 7, which participated in Nonindicted Co.

2) Defendant 1 had Defendant 7 Co., Ltd. conduct an act of bearing the debt amounting to KRW 54.27 billion on seven occasions beyond the scope of recognition under the judgment of the court below (2.b. 1). Defendant 1 had Defendant 7 Co. 3 conduct an act of bearing the debt amounting to KRW 54.27 billion on seven occasions, thereby obtaining property benefits equivalent to the same amount from Nonindicted Co. 3, and suffered property damage equivalent to the same amount

3) On July 30, 2008: around 09:38:18, Defendant 1 conspired with Nonindicted 3, and concluded a sales contract of 5,000 shares from Nonindicted 27 account; around 09:58:06 on the same day, Defendant 1 sold 10,00 shares from Nonindicted 28 account; around 09:39:48 of the same day and around 09:54:14 of the same day, Defendant 1 concluded a sales contract of 7,00 shares and 10,00 shares from Nonindicted 4 Stock Company’s account through Defendant 4 and concluded a sales contract of 4,89 shares and 8,99 shares; around 08:57:199 on July 1, 2009; around 08:00 shares from Nonindicted 76, 7000 shares in the name of Nonindicted 29:360 on July 27, 2008; and purchased the shares from Nonindicted 3630 on the same account under the name of 136.7.

4) From March 11, 2008 to August 31, 2009, Defendant 1 conspiredd with Defendant 3, 4, 5, 6, 7, 30, 30, 31, 32, 33, 16, and 14 on a total of 73 securities accounts, such as the securities account of Nonindicted Company 7, and acquired the unjust enrichment of KRW 2,952,62,00,00,00 from March 11, 200 to August 31, 2009 through a total of 73 securities accounts, including the securities account of Nonindicted Company 76, and acquired the unjust enrichment of KRW 1,50,00,000 through a total of 23 securities accounts, including the securities account under the name of Nonindicted Company 3, and acquired the unjust enrichment of KRW 6,500,005,00,000,000.

B. Determination

As seen in the reasoning judgment on the appeal in the decision, since each of the facts charged above constitutes a case where there is no proof of crime, it shall be pronounced not guilty under the latter part of Article 325 of the Criminal Procedure Act, or as long as it is found guilty of the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement), the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation

2. Defendant 9

A. Facts charged

1) On June 3, 2009, Defendant 8 and Co-Defendant 10 borrowed KRW 7 billion from Defendant 9, who was a bond business operator, in the name of the personal name of Defendant 8, and on the same day, Defendant 9 had Defendant 9 pay an amount equivalent to KRW 7 billion ( KRW 500,14 million per share) from the capital increase for new shares issued by Nonindicted Co. 22 Co. 18 in the name of six persons, including Nonindicted Co. 18 Co. 22, and offered six subscription accounts as security to Defendant 9, and around that time, he received a written deposit of payment for new shares from Nonindicted Co. 34, who was a major company, and received a written deposit of payment for new shares from the Incheon District Court on June 5, 2009, the total number of outstanding shares issued by Nonindicted Co. 22 to be changed to KRW 106,59,515,5379,757,500.

Defendant 8, on June 5, 2009, deposited 7.5 billion won in the account of Nonindicted Co. 22, 2009, deposited by Defendant 9 as a cashier’s check, and offered it as a collateral for the principal and interest of the obligation to Defendant 9. On June 24, 2009, Defendant 8 returned the check to Nonindicted Co. 22 to the account of Nonindicted Co. 35 and returned it back to Defendant 9, and returned it back to the account of Nonindicted Co. 35, and returned 14 million won of the shares offered as security to Defendant 9.

Defendant 9, in collusion with Defendant 8 and Co-Defendant 10 of the first instance court, proposed the payment of the share price of KRW 7 billion.

2) On June 5, 2009, in collusion with Defendant 8 and Co-Defendant 10, Defendant 9 submitted to the Incheon District Court on June 5, 2009 a certificate of safekeeping of shares payment, which was issued by pretending the payment of shares as described in the foregoing paragraph A, and made it possible for Defendant 9 to register the capital increase in the corporate register of Nonindicted Co. 22 in the Commercial Information Processing System.

As such, the Defendants conspired to make a false report to the public official to enter false facts in the commercial registration electronic data processing system, which is a public electronic record, and exercised it by allowing the public official to keep it at a place around that time.

B. Determination

As seen in the reasoning of the judgment on appeal, each of the above facts charged constitutes a case where there is no proof of a crime, and thus a not-guilty verdict is rendered under the latter part of Article 325

Judges Choi Jae-in (Presiding Judge)