[1] In a case where the person who acquired or disposed of shares claims compensation for damages caused by a false description in the business report to a stock-listed corporation, etc. under Article 162 of the Financial Investment Services and Capital Markets Act, the person who bears the burden of proving the existence of causation between the false description in the business report and the damage (=the stock-listed corporation, etc.) and the method and degree

[2] In a case where a normal share price was formed after the fact of window dressing accounting or false disclosure was revealed, and the part supported by false information was entirely removed, whether there exists a causal relationship between the change of share price and the window dressing accounting or false disclosure (negative in principle), and in a case where shares were sold after the normal share price formation date or where shares were kept until the closing date of argument, the method of calculating the amount of

[3] In the case of a claim for damages to which Article 162 of the Financial Investment Services and Capital Markets Act applies, whether offsetting negligence or limiting liability based on the equitable principle (affirmative)

[1] Article 162(1), (3), and (4) of the Financial Investment Services and Capital Markets Act / [2] Article 162(3) and (4) of the Financial Investment Services and Capital Markets Act / [3] Article 162 of the Financial Investment Services and Capital Markets Act, Articles 396 and 763 of the Civil Act

[1] [2] [3] Supreme Court Decision 2006Da16758, 16765 Decided October 25, 2007 (Gong2007Ha, 1806) / [1] [3] Supreme Court Decision 2014Da207283 Decided January 29, 2015

Plaintiff 1 and 3 others (Law Firm Han & Yang, Attorney Kim Il-young, Counsel for the plaintiff-appellant)

[Defendant-Appellee] Han Jin-Tech Co., Ltd. (Attorney Jung-jin et al., Counsel for defendant-appellee

Seoul High Court Decision 2014Na2008880 decided April 24, 2015

All appeals are dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. In a case where a person who acquired or disposed of stocks claims compensation for damages incurred by a stock-listed corporation due to a false description in the business report, etc. on the basis of Article 162 of the Financial Investment Services and Capital Markets Act (hereinafter “Capital Markets Act”), the person who acquired or disposed of stocks does not need to prove the existence of causation between the false description in the business report and the occurrence of damages pursuant to Article 162(4) of the Capital Markets Act, and to exempt the stock-listed corporation from liability, etc., the absence of such causation must be verified. Furthermore, the proof of “non-existence of causation of damage” under Article 162(4) of the Capital Markets Act can be made by means of proving the fact that the unlawful act, such as the pertinent false disclosure, directly or indirectly, did not have any influence on the occurrence of damages, or by means of other factors than the pertinent false disclosure, etc. at issue, such as the pertinent false disclosure, etc. at issue, which occurred in whole or in part (see, e.g., Supreme Court Decision 2006Da1675384, Oct. 28, 2019.

In this case, if it is assumed that a specific case did not occur on the basis of the data before the occurrence of the specific case, the research method of the case may be used to estimate the expected return and normal price, and to analyze whether the specific case has a statistical meaning to the share price by using the estimates of excess return, which is the difference between the expected return rate and the actual return rate observed in the market. However, in light of the legislative intent of Article 162(3) of the Capital Markets Act, which provides for estimating the amount of damages in terms of protecting investors, it cannot be deemed that the presumption of damages is broken solely on the basis of the degree that it is unclear that the price of the shares purchased after the illegal act, such as false disclosure, has decreased in the price of the shares purchased after the illegal act, such as false disclosure, etc., but the degree that it is unclear as to whether the cause of stock price decline after the publication of the illegal act, such as false disclosure, etc., was caused (see Supreme Court Decision 2014Da207283, Jan. 29, 2015).

Meanwhile, in a case where a normal share price is formed after the fact of window dressing accounting or false disclosure has been revealed, and the shock arising therefrom has come and all of the parts supported by such false information have been removed, the change in the share price after such normal share price formation date does not have causation with the window dressing accounting or false disclosure, barring any special circumstances. Thus, in a case where it is confirmed that the pertinent shares were sold after the normal share price formation date or held until the closing date of oral argument, there is proof of absence of causation under Article 162(4) of the Capital Markets Act with respect to the difference between the normal share price and the actual disposal price (or the market price at the closing date of oral argument) among the amount of damages under Article 162(3) of the same Act. In this case, the amount of damages shall be the amount calculated by deducting the share price on the date of normal share price formation from the purchase price (see, e.g., Supreme Court Decision 2006Da16758, Oct. 25, 2007).

B. The lower court acknowledged that the Defendant who submitted a business report, etc. prepared on the basis of window dressing accounting was liable for damages under Article 162(1)1 of the Capital Markets Act, and estimated the amount of damages suffered by the Plaintiffs pursuant to Article 162(3) of the same Act, and determined as follows as to the Defendant’s assertion that there was no causation of damages under Article 162(

(1) The Defendant asserts that the amount of damages should be excluded from the calculation of the amount of losses, since the increased share price in accordance with the report and public notice of the plan for acquisition of shares with Samsung Heavy Industries Co., Ltd. (hereinafter “T&T”) is not attributable to the window dressing accounting. However, although there exists a research result that the price of shares of the Defendant has increased after the report and public notice of the plan for acquisition of shares, and that the report and public notice of the plan for acquisition of shares have influenced that the price of shares had a significant impact on the price of shares of the Defendant, it is difficult to conclude that there is no proximate causal relation with the submission of the Defendant’s window dressing accounting or false business report, etc. in light of the fact that the annual business report containing financial matters of the company is the most objective data indicating the company’s financial status, and that the Samsung Heavy Industries promoted the share acquisition plan based on the Defendant’s financial status which is considerably unsurded by the window dressing accounting. The Defendant’s above assertion cannot be accepted.

(2) The Defendant asserts that the portion of the share price, which fell due to the so-called “sales” after being aware of the window dressing accounting, should be excluded from calculating the amount of damages because it is not related to the window dressing accounting. However, the Defendant’s window dressing accounting was known and the transaction of the Defendant’s shares was discontinued for about 10 months from July 11, 2012 to July 25, 2012, and the price of the Defendant’s shares was continuously lowered during the period from July 11, 2012 to August 21, 2012. However, there was a research result of the instant case where the price of the Defendant’s shares was lower than the normal share price. However, it is difficult to readily conclude that the Plaintiff’s share price was lower than the normal share price. In light of the fact that there was a mass sales by institutional investors for three days from July 11, 2012, there was no subsequent mass sales by individual investors, and that there was no imbalance between institutional investors and individual investors after the resumption accounting.

(3) The Defendant asserts that the part of the change in the price of the Defendant’s shares after the window dressing accounting had been removed should be excluded from calculating the amount of damages since it is not related to the window dressing accounting (the Defendant asserts that the price of the Defendant’s shares continuously fell after July 11, 2012, and that the 13,700 won, the closing price of which was recovered on August 21, 2012, was removed from the effect of window dressing accounting). However, since July 11, 2012, the price of the Defendant’s shares was continuously reduced to 0.7,00 won until July 26, 2012, the 200 won was reduced to 30.7,000 won, and the 20.77,00 won was reduced to 20,050 won after July 27, 2012, and the 200,000 won was reduced to 3.7,777,712.77,207.

C. Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, we affirm the judgment of the court below as just. Contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles as to the non-existence of causation under Article 162(4) of the Capital Markets Act, or by violating

2. Regarding ground of appeal No. 2

A. In cases of a claim for damages governed by Article 162 of the Financial Investment Services and Capital Markets Act, the basic ideology of the Compensation Act, such as fair apportionment of damages, applies. As such, comparative negligence may be set off or liability may be limited based on the equitable principle, citing the circumstances where the victim was negligent in contributing to the occurrence and expansion of damages. In particular, given that the factors leading to the fluctuation in stock prices are very diverse and multiple factors simultaneously, and it is extremely difficult to estimate when and to what extent a specific factor has exercised influence, there may be cases where it is extremely difficult to prove that the overall situation of the company or the stock market for the period from the time of purchase to the time of the loss, other than false disclosure, has influenced the occurrence of the loss, but it is extremely difficult to prove the amount of damages arising from such other circumstances in light of the principle of fair apportionment of damages (see, e.g., Supreme Court Decisions 2006Da167588, Oct. 25, 2007; 207Da167817, Jan. 27, 2078).

B. Examining the reasoning of the judgment below in light of the above legal principles and records, the judgment of the court below that limits the defendant's liability by the ratio as stated in its reasoning is just and acceptable, and there is no error in the misapprehension of legal principles as to comparative negligence or limitation of liability.

3. As to the third ground for appeal

A. The court below acknowledged that the amount of the cited additionally in the court below's judgment is reasonable until the time when the court below rendered a decision, but held that the defendant's objection against the amount of the cited additionally was reasonable until the time when the court below rendered a decision of first instance as to whether the defendant's obligation to perform is established or not, but as to the damages which the court below accepted by the court of first instance, it is reasonable that the defendant's objection is reasonable until the time when the court of

B. Examining the reasoning of the judgment below in light of the relevant legal principles and records, the judgment of the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on Article 3 of the Act on Special Cases concerning the

4. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jo Hee-de (Presiding Justice)