205Na9154 Compensation (as referred to in this paragraph)

100

Sinpo-si 000 Sinpo-dong 00

Attorney Lee Do-young

Attorney Lee Jae-soo

100

Japan-dong Heading Dong-dong, 000

Attorney Lee Do-young

Seoul Central District Court Decision 2005Gahap35795 Decided July 13, 2005

June 20, 2007

July 4, 2007

1. The part against the defendant in the judgment of the first instance shall be revoked;

2. The plaintiff's claim against the above cancellation portion is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant's claim of this case against the plaintiff 177,831,372 won and the plaintiff's claim of this case from December 20, 201

and until the date of service of the application for change of cause, 5% per annum and 20% per annum from the following day to the date of full payment.

D. (The plaintiff reduced the purport of the claim in the trial).

2. Purport of appeal

The order is as set forth in the text.

1. Basic facts

The following facts are not disputed between the parties, or there is no conflict between Gap evidence 1-2, Gap evidence 2-1-5, Gap evidence 3-1-4, Gap evidence 5-1, 2, Gap evidence 5-2, Gap evidence 6, 10, Eul evidence 3 through 5, and the overall purport of the pleadings as a whole, and the results of the appraisal commission to the claim appraisal company of 000, and the fact inquiry results of each fact inquiry.

A. Status of the parties

On January 11, 2001, the defendant was registered in the Association Brokerage Market (the name was changed to the KOSDAQ on January 29, 2004) and was the representative director of Madiia Co., Ltd. (hereinafter referred to as Madiia) who was delisting on August 11, 2004, and the plaintiff is an investor who traded Madi's shares in the Association brokerage market.

B. The non-party 1, the non-party 2, the non-party 3, and the non-party 4's market price manipulation (1), the representative director of the company 00 investment consulting (hereinafter "00 investment consulting") and the non-party 2, the director of the above company, the non-party 3, and the non-party 4, who were the employees of the above company, planned to gain profits from the market price by raising her mother-child's share price. The non-party 2.5 billion won borrowed from the defendant, the funds of the non-party 1, and the entrusted customer's funds, etc. were deposited from the defendant, and the non-party 2, the non-party 2, the non-party 3, and the non-party 4 agreed to submit the market price manipulation order using 49 accounts, etc. (2) Accordingly, the non-party 1, the non-party 3, and the non-party 4 conspired in collusion on June 12, 2001 to 201.

12. Until December 28, 200, for the purpose of creating a misleading appearance of active trading or causing other person to make a wrong judgment, 1.7.

13. 09: 01: at around 000 investment consulting offices around 005, Nonparty 1 traded Madi stocks using the Home Exchange System (HTS) (HTS) with the point of pressure suspension of Nonparty 2’s 00 securities pressure, the immediately preceding transaction is ordered to purchase 1,00 won, 700 won higher than the other 700 won, and 1,500 won higher than the other 80,100 won to increase the share price of Madi stocks from June 12, 2001 to December 12, 2001.

28. up to 1,505 times in total, 632,229 valuable orders made between them, and 22 June 22, 2001

08:0: (a) around 00 investment consulting offices at 00 investment time; (b) Nonparty 3 traded shares using the Home Trading System at 00 Gangnam Branch 5; (c) immediately before the end of 88,00 won, 2,000 won at 0.3 times from June 12, 2001 to December 28, 201; (c) 1,479 shares were released at 06.3 times in total on 1,479 shares; and (d) Nonparty 2,50 shares were released at 0.3 times in total on 1,479 shares; and (e) Nonparty 3,50 shares were released at 0.3 times in the name of 6:4,00 shares; and (e) Nonparty 2,50 shares were released at 1,60,000 won in the name of 6.4,000 shares; and

C. Defendant’s participation in market price manipulation

Around September 20, 2001, the Defendant came to know of the fact that Nonparty 1 et al., etc. had engaged in price manipulation in order to obtain profits from the market price of the shares of Mod child as above. From this point of time, the Defendant participated in the above market price manipulation by providing Nonparty 1 et al. with the shares of Mod child owned by himself from December 28, 2001 or by providing the internal information of Mod child to Nonparty 1.

D. Criminal punishment, the defendant, the non-party 1 and the non-party 2 were indicted against the violation of the Securities and Exchange Act, including the above market price manipulation around October 2002. The non-party 1 was sentenced to imprisonment with prison labor on December 10, 2002 as Seoul Central District Court 2002Da10029, and 10546 (merger) and with the non-party 1's imprisonment with prison labor on November 1 and 6, 2002, the non-party 2 was sentenced to a suspended sentence of two years and a fine of two billion won; the non-party 2 was sentenced to a suspended sentence of two years and a fine of 150,000,000 won; the non-party 3 was sentenced to imprisonment with prison labor on October 5, 2003 as the above court 202No2538; the non-party 1 was sentenced to a suspended sentence of two years and a fine of three years and 1 million won on the same day.

E. The Plaintiff’s transaction of Madia shares (1) purchased Madia shares using an account in the Plaintiff’s name (00 securities 00 - 000 - 000000) and an account in the name of Nonparty 6 of the Plaintiff’s wife (00 - 000 - 000000). From the account in the Plaintiff’s name, the Plaintiff purchased Madia shares on March 2, 2001 until August 21, 2002 as stated in the purchase column in attached Form 1. Since sold Madia shares 137 shares on March 14, 201 to September 5, 2002, the Plaintiff purchased Madia shares from Nonparty 2 to 30 Madia shares on September 25, 2002, as stated in attached Form 1, sold Madia shares from March 14, 2001 to September 24, 2002.

F. As a result of appraisal commission (1) 000 bonds appraisal company: (2) the period of the instant market price manipulation of Nonparty 1, etc. (the evaluation period) was set from June 12, 2001 to July 31, 2002, during which the instant market price manipulation was likely to have an impact on her motherland share price; (3) the assessment period was determined from 20 years to 20 years after the date of appraisal; and (4) the assessment period was set from 20 years to 3 years after the date of appraisal; and (4) the assessment period was determined from 20 years to 10 years after the date of appraisal; and (5) the assessment period was determined from 20 years to 20 years after the date of appraisal; and (5) the appraisal period was determined from 20 years to 3 years after the date of appraisal; and (4) the appraisal period was determined from 20 years to 10 years to 20 days after the date of appraisal appraisal.

2. Determination on the cause of the claim

A. Summary of the plaintiff's assertion

The Plaintiff asserts that, as the cause of the instant claim, Nonparty 1, 2, 3, and 4 and the Defendant’s share price increase artificially due to the market price manipulation, and that, after the end of the market price manipulation, the Plaintiff, who purchased shares at the price formed due to the market price manipulation, suffered damages equivalent to the difference between the actual purchase price and the normal price price during the pertinent period. Thus, the Defendant is liable to compensate for the damages as above in accordance with Article 188-5(1) of the Securities and Exchange Act or Article 756 of the Civil Act.

B. Determination

(1) Market price manipulation and liability for damages

When the Defendant came to know on September 20, 201 that Non-party 1 et al. had engaged in price manipulation in order to obtain profits from the market price of the shares of Mod child, the fact that Non-party 1 et al. participated in the market price manipulation of the shares by providing Non-party 1 et al. with the shares of Mod child owned by himself from December 28, 2001 or providing the inside information of Mod child et al. to Non-party 1 is as seen earlier. Therefore, if the Defendant’s act of price manipulation affected the share price of the shares of Mod child and thereby causing damage to the Plaintiff, the Defendant is liable to compensate for the damages suffered by the Plaintiff pursuant to Article 188-5(1) of the Securities and Exchange Act or

(2) We examine whether the damage occurred or not, therefore, whether the defendant's manipulation of price had an influence on the share price of the shares because the defendant's manipulation had an ambiguous share price, thereby causing damage to the plaintiff.

In calculating damages incurred by an investor who traded or consigned the securities at the securities market or the KOSDAQ market based on the price formed by the market price manipulation, the difference between (i) the share price formed at the time of the purchase without such market price manipulation and the share price actually purchased by the investor (where the share price is actually sold at a price higher than the normal share price, the difference between the pertinent share price and the pertinent share price) can be deemed as damages. Here, according to the method of calculating the normal share price, the difference between the share price and the pertinent share price that would have occurred during the affected period (the pertinent period) and the share price that would have occurred without such market price manipulation and the share price that would have occurred during the pertinent period (the pertinent period), and (ii) the pertinent difference would have a statistical meaning, based on the most appropriate index, such as the share price index before or after a certain period of time, the comprehensive share price index, the index, and the share price of the same kind of company, which was calculated based on the average share price increase of 260 years during the pertinent period of 206 years.

With respect to the instant case, after setting the evaluation period from June 12, 2001 to July 31, 2002, when the pertinent market price manipulation was commenced, the results of the analysis conducted using Ebent, the first half of the year 2001, the stock price of the company being valued, the stock price of the company being valued, the stock price of the company being valued in 2001, the stock price of the company being valued in the year 2001, etc.

20. From June 21, 2001 to December 20 of the same year, however, the period during which the share price of Maddiia shares is considerably higher than that of an estimated normal share price in a statistical manner, shall be from June 21, 2001 to June 27 of the same year, 6.

29. The appraiser appraised from August 22 of the same year to August 29 of the same year, and from August 31 of the same year to September 10 of the same year, as seen earlier. According to the appraiser's appraisal, the period during which the share price of Madi child was adversely affected by the manipulation of market price in this case.

6. From June 29 of the same year to June 29 of the same year (except for June 28 of the same year) and from August 22 of the same year to September 10 of the same year (except for 8.

30. Recognizing the fact that the Defendant was only able to recognize the fact that the Defendant did not participate in the market price manipulation by Nonparty 1, etc., since September 20, 201, there is no evidence to find that the instant market price manipulation had an impact on the statistical meaning of the actual market price manipulation by being maternity, and thus, the Plaintiff’s above assertion is without merit without further review.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be dismissed for all reasons. Since the part of the judgment of the court of first instance different from this conclusion is unfair, the part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's claim corresponding to the above cancellation part shall be dismissed, and it is so decided as

Judges Ko Young-han

Judge Park Tae-tae

Judges Kim Yong-chul