[1] The elements for establishing the crime of gambling as provided in Article 247 of the Criminal Code

[2] Criteria for distinguishing between the inclusive crime and the substantive concurrent crime

[3] In a case where the Defendant established a private futures trading site in which transaction tax information in the futures trading market is in real time linked, and members deposited money into the Defendant’s account, stored electronic currency converted at a certain rate when they deposited money, and then operated the site in a manner that deducts fees each time they traded, and converted it into cash according to the original application rate when they were requested to exchange electronic currency, the case holding that punishment of the Defendant’s act for a violation of Article 44 subparag. 1 and Article 11 of the former Financial Investment Services and Capital Markets Act by running an unmanned financial investment business cannot be permitted in violation of the principle of no punishment without law

[1] Article 247 of the Criminal Act / [2] Article 37 of the Criminal Act / [3] Article 12(1) of the Constitution of the Republic of Korea; Article 1(1) of the Criminal Act; Articles 3(1) and (2), 4(10)5, 5(1), 6(1), (2), and (3), 11, and 444 subparag. 1 of the former Financial Investment Services and Capital Markets Act (Amended by Act No. 11845, May 28, 2013)

[1] Supreme Court Decision 2001Do5802 Decided April 12, 2002 (Gong2002Sang, 1193) Supreme Court Decision 2008Do10582 Decided February 26, 2009 (Gong2009Sang, 396) / [2] Supreme Court Decision 2005Do278 Decided May 13, 2005 (Gong2006Do3172 Decided September 8, 2006) (Gong2006Ha, 2026) Supreme Court Decision 201Do14135 Decided March 29, 2012

Defendant

Defendant

Law Firm Clovis, Attorneys Sung-sing et al., Counsel for the defendant-appellant

Seoul Central District Court Decision 2013No1555 Decided August 9, 2013

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 grounds of appeal.

A. As to the ground of appeal on the crime of gambling opening

The crime of gambling opening under Article 247 of the Criminal Act is established by opening a gambling place under the control of a person who is a resident for profit. The crime of gambling is an independent crime separate from the crime of gambling. The term "gambling" means that the participating party gets a property and contests the acquisition or loss of property by a contingency, and the term "for profit" refers to the intention of seeking an illegal pecuniary benefit in return for opening a gambling place (see Supreme Court Decision 2001Do5802, Apr. 12, 2002, etc.).

Based on its adopted evidence, the lower court acknowledged the facts as indicated in its reasoning, and found the Defendant guilty of this part of the facts charged on the ground that: (a) transactions conducted by the members of the instant case using each private site opened by the Defendant mainly with the purpose of “the acquisition and loss of property by drinking materials and by chance; and (b) gambling constitutes gambling; and (c) the establishment of each private site of the instant case constitutes gambling opening.

Examining the reasoning of the judgment below in light of the above legal principles and records, the above judgment of the court below is just and acceptable, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles as to gambling opening.

B. As to the ground of appeal on acquittal

Where a number of acts falling under the name of the same crime continues to be conducted for a single and continuous period as a single and continuous criminal intent, and where the legal benefits from such damage are the same, each of these acts shall be punished by a single comprehensive crime. However, where the unity and continuity of a criminal intent are not recognized in several crimes or the method of committing a crime is not the same, each crime constitutes a substantive concurrent crime (see Supreme Court Decisions 2005Do278, May 13, 2005; 2006Do3172, Sept. 8, 2006, etc.).

The lower court determined that the res judicata effect of the instant summary order does not extend to this part of the facts charged on the ground that the facts charged of the instant summary order and the instant facts charged do not constitute a blanket crime, on the following grounds: (a) the circumstances acknowledged by the adopted evidence, namely, the crime for which the summary order became final and conclusive, and the crime in this part of the facts charged, are different from the location of the office that operated each private site; (b) the operator of the private site; and (c) the method of entering and withdrawing from the private site; and (d) the Defendant was indicted as a single criminal in this part of the facts charged, but the Defendant was prosecuted as a joint principal offender in this part of the facts charged.

In light of the above legal principles and records, the above judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of the legal principles as to blanket crimes or acquittal.

2. The decision shall be made ex officio;

A. Article 11 of the Financial Investment Services and Capital Markets Act (amended by Act No. 11845, May 28, 2013; hereinafter “former Financial Investment Services and Capital Markets Act”) provides that “any person shall not engage in financial investment business (excluding investment advisory business and discretionary investment business) without authorization therefor (including authorization for changes) under this Act.” Subparagraph 1 of Article 444 of the said Act provides that a person who engages in financial investment business (excluding investment advisory business and discretionary investment business) without authorization for changes or a fine not exceeding five years or 200 million won shall be punished by imprisonment with prison labor or by imprisonment with labor for a certain amount of money or its price index for the same underlying assets. It means an investment trading business, collective investment business, discretionary investment business, discretionary investment business, trust business, or investment business, whichever is subject to solicitation or sale of underlying assets on its own account, regardless of the intention to make an offer or sale of such underlying assets.” Article 6 (1) of the said Act provides that “The value of such underlying assets shall be purchased on its own account.”

B. According to the reasoning of the lower judgment and the record, ① the Defendant was provided with information on actual transaction time through the so-called Home Trading System (hereinafter “HTS”); the program developer purchases a private HTS program that connects real time with the above transaction information and provides screen similar to HTS of a securities company; and then establishes the site’s respective private sites so that its members can receive the above HTS program; ② the operation method of each of the private sites of this case can accumulate electronic currency converted into the applicable rate of its members’ choice if members subscribed to money to the account of the Defendant, etc.; the members shall subscribe to 00 futures trading through HTS; and the Defendant, etc. shall be paid the amount of money generated by each of the instant securities companies, including 0 futures trading options, even if members request to exchange electronic currency, and the amount of money generated by the Defendant, etc. shall not be converted into the market price of each of the instant securities companies’ investment options, etc.

In light of the above facts in light of the provisions of this Act, although the object of transactions by members at each private site of this case may be deemed to fall under financial investment instruments under the former Capital Markets Act, the act of investment trading business under the former Capital Markets Act is engaged in selling, purchasing, issuing, underwriting, soliciting offers, offering, and accepting offers. The Defendant did not allow members to engage in futures trading conducted in the real market established by the Korea Exchange while opening and operating each site of this case, but merely provided services for members to make their own investments on the basis of the gift index and exchanged according to the result of the transaction. Thus, it cannot be deemed that the Defendant committed direct sale and purchase against its members. Furthermore, even if there is a need to punish the illegal financial investment business entity, such as each site of this case, such as fraud of investment funds, deprivation of opportunity to realize profits by iceizing computer errors, and thus, it cannot be punished as a violation of the penal provisions under Article 44 subparagraph 14 of the former Capital Markets Act or penal provisions under Article 14 subparagraph 1 of the former Capital Markets Act.

However, the Defendant opened each of the instant private sites, and conducted 200 futures trading, which is exchange-traded derivatives, using electronic currency with its members, and liquidated profits and losses with its members as a result of transactions. As such, the Defendant’s act constitutes an act of opening and operating an exchange-traded derivatives market, which is a business of an exchange under Article 377 of the former Capital Markets Act, and conducting business of trading exchange-traded derivatives, and constitutes an act of opening facilities similar to the financial investment instruments market and conducting transactions using such facilities.

C. Therefore, the lower court was justifiable to have determined that the Defendant established facilities similar to the financial investment instruments trading market. However, solely based on its stated reasoning, the lower court erred by misapprehending the legal doctrine on the operation of the unmanned financial investment business under Articles 44 subparag. 1 and 11 of the former Capital Markets Act, which affected the conclusion of the judgment by misapprehending the legal doctrine on the operation of the financial investment business.

3. Conclusion

As seen earlier, the part of the lower judgment regarding the Defendant’s violation of the Capital Markets Act by running a financial investment business should be reversed. However, the lower court found the Defendant guilty of not only the Defendant’s violation of the Capital Markets Act by opening gambling facilities and the establishment of similar facilities, but also the Defendant’s violation of the Capital Markets Act by running a financial investment business, and concluded that each of these crimes is in a commercial competition relationship under Article 40 of the Criminal Act, and that each of these crimes constitutes a separate criminal act by each private site, and thus, sentenced to a single punishment under the former part of Article 37 of the Criminal Act, on the ground that each private site constituted a separate criminal act. Accordingly, the lower court’

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 Kim Shin (Presiding Justice)