[1] The meaning and calculation method of "profit derived from a violation" under the proviso of Article 207-2 of the former Securities and Exchange Act

[2] The case reversing the judgment of the court below which was based on the determination of the amount of fine, calculated excessively the gross profit accrued from market price manipulation

Defendant

Defendant

Attorney Lee Young-soo

Seoul District Court Decision 2003No7844 Delivered on November 5, 2003

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

1. We examine the first ground for appeal.

Examining the reasoning of the judgment below and the records of the court of first instance maintained by the court below, in order to increase the market price for the shares of the above net company (hereinafter referred to as "the shares of this case") using ten accounts of the securities company with the defendant's name when the defendant conspireds 220,000 shares on July 3, 201 to list them on the KOSDAQ and listed them on the KOSDAQ after the price decline, the court below's finding of facts that the total purchase amount of the shares of this case traded through the above borrowed account was 4,02,793 shares, and the total sale amount was 2,962,560 shares was 2,560 shares, and there was no error of law in the misapprehension of the rules of evidence as alleged in the ground of appeal No. 201.286, Feb. 29, 2006, as stated in the separate sheet of the judgment below.

2. We examine the second ground for appeal.

Article 207-2 subparagraph 2 of the former Securities and Exchange Act (amended by Act No. 6695 of Apr. 27, 2002) provides that a person who violates the provisions of Article 188-4 of the same Act shall be punished by imprisonment with prison labor for not more than ten years or by a fine not exceeding twenty million won: Provided, That where the amount equivalent to three times the profit earned or loss avoided by the violation exceeds twenty million won, the person shall be punished by a fine not exceeding the amount equivalent to three times the profit or loss amount. The "profit accrued from the violation" prescribed in the proviso of the same Article refers to "the profit accrued from the violation, which is the opposite concept to the loss, which is the gross profit accrued from the violation, which is the difference calculated by deducting the total purchase amount and the transaction expense from the total amount of the stock transaction related to the actual transaction, and in calculating such profit, the profit accrued from the actual transaction refers to the profit accrued from deducting the total purchase amount and the transaction expense from the total amount of the stock transaction related to the market price manipulation.

However, the court below erred in the misapprehension of legal principles as to calculation of profits from stock price manipulation as stated in the judgment of the court below in the calculation of profits from the above market price manipulation during the period from August 23, 2001 to January 7, 2002, with the exception of 1,040,233 stock price calculation, which was held without selling until the end of the above market price manipulation, and with the calculation of "total profits from stock sale" as stated in the "total profits from stock sale" as stated in the calculation of 474,753,021 stock price calculation, which is below 474,753,00 won, and the above calculated profits from the above calculation of profits from stock price manipulation as part of the sentencing ground against the defendant (the ground of appeal pointing out that the difference between the total purchase price and the trading price should not be accepted as the above calculation of profits from the total sale price of 30 billion won and the above calculation of profits from the defendant's total profits from 200,000 won.

3. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jae- Jae (Presiding Justice)