[1] The purpose of the provision of Article 188-4 (4) of the Securities and Exchange Act and the standard for determining the fraudulent unfair trading under the same provision

[2] The case holding that a fraudulent unfair trading under the Securities and Exchange Act constitutes an unfair trading in case where a representative director of a stock company submits to the Securities Transaction Committee or the Korea Stock Exchange a business report, etc. containing false matters concerning the company's financial affairs on the basis of the false financial statements prepared by the method of settlement of accounts by means of a window dressing and, in case where he has confirmed an uncertain business outlook or announced as if he would soon start its business prospects, sold shares under his control and obtained considerable economic benefits by advertising the company's share price through newspapers, news reports, or inducements, and sold shares by means of acquiring privately placed convertible bonds prior to the sale of shares, and then maintained its share ratio by converting the convertible bonds

[1] Article 188-4 (4) 1 of the Securities and Exchange Act prohibits intentionally an act of spreading false prices or false facts or other rumors or using deceptive schemes in order to gain unjust profits in connection with the sale and purchase or other trading of securities. Article 188-4 (4) 2 of the same Act prohibits an act of inducing misunderstanding of other persons by using documents containing false representation as to important matters in connection with the sale and purchase or other trading of securities. As such, the Securities and Exchange Act prohibits such an act of inducing unfair trading of securities to gain money or other economic benefits by inducing other persons. As such, the purpose of prohibiting unfair trading is to protect individual investors' interests in securities transaction and protect investors' trust in the general securities market, thereby contributing to the development of the national economy. Thus, whether it constitutes an act related to trading of securities, etc., or whether it is false or not, or whether it seeks to gain unjust profits or economic benefits, etc. should be determined by the objective criteria, comprehensively taking into account the status of the actor, the management status of the issuing company, the situation of such act, etc. before and after such act.

[2] The case holding that a fraudulent unfair trading under the Securities and Exchange Act constitutes an unfair trading in case where the representative director of a stock company submits a business report, etc. stating false matters concerning the company's financial affairs, based on the false financial statements prepared by the method of settlement of accounts, to the Securities Transaction Committee or the Korea Stock Exchange; where an uncertain business outlook has been finalized or it has been announced as if it would soon start, and obtained substantial economic benefits by selling shares under his/her control as a result of the increase in the company's stock price by advertising through newspapers, news reports, or inducements; and where he/she sold shares after preparing for the sale of shares by means of acquiring privately placed convertible bonds prior to the sale of shares;

[1] Article 188-4 (4) of the Securities and Exchange Act / [2] Article 188-4 (4) of the Securities and Exchange Act

Defendant

Defendant

Law Firm Barun Law Office, Attorney Park Ho-ho

Seoul District Court Decision 2000No6369 Delivered on September 20, 2000

The appeal is dismissed. One hundred and twenty days out of the detention days after the appeal shall be included in the original sentence of the original judgment.

The defendant and his defense counsel's grounds of appeal are examined together (to the extent of supplement in case of supplemental appellate briefs not timely).

1. On the first ground for appeal

According to the records, the defendant, the representative director of the non-indicted corporation (hereinafter referred to as the "non-indicted corporation") was prosecuted in violation of Article 188-4 (4) 2 of the Securities and Exchange Act as to Article 188-4 (3) of the same Act as to Article 188-4 (4) 2 of the same Act as to Article 188-4 (2) 2 of the same Act, since the defendant, who was the representative director of the non-indicted corporation (hereinafter referred to as the "non-indicted corporation"), was false in the business year 1996 of the non-indicted corporation and the financial statements as a result of the settlement of financial statements for the first half of 1997, which was made through a window dressing, and he was prosecuted by misunderstanding other persons by using the printed materials containing the same contents. The court below acknowledged the above facts charged as guilty and stated them in the above facts charged, and

2. On the second ground for appeal

Examining the reasoning of the judgment below in light of the records, the court below is justified in finding and punishing the defendant guilty of the crime that stated the above false financial statements in the business report and semiannual report of the non-indicted company in the securities management committee and the Korea Stock Exchange, and there is no error of misconception of the facts in violation of the rules of evidence. The grounds of appeal on this part are not acceptable. It is not acceptable to accept the grounds of appeal. It is so decided as per Disposition by the assent of all participating Justices on the Securities management committee and the Korea Stock Exchange.

3. On the third ground for appeal

A. Article 188-4(4)1 of the Securities and Exchange Act prohibits an act of spreading intentionally the false market price or false facts or other rumor or using a deceptive scheme in order to gain unjust profits in connection with the sale and purchase or other trading of securities. Article 188-4(4)2 of the same Act prohibits an act of inducing misunderstanding of other persons by using documents containing false representation concerning important matters in connection with the sale and purchase or other trading of securities. As such, the Securities and Exchange Act prohibits such an act of inducing unfair trading of securities to gain money or other profits on property. As such, the purpose of prohibiting unfair trading is to protect individual investors' interests in securities transaction and protect investors' trust in the general securities market, thereby contributing to the development of the national economy. Thus, whether it constitutes an act related to the trading of securities, etc., or whether it is false or not, or whether it seeks to gain unjust profits or economic profits, etc. should be determined by the objective criteria, comprehensively taking into account the status of the actor, the management status of the issuing company, the situation of the investment company, and the price before and after such act.

B. According to the reasoning of the judgment of the court below and the reasoning of the judgment of the court of first instance, it was justified in finding that the defendant acquired shares of the non-indicted company at a low price, and acquired profits from the sale of the above convertible bonds with a view to maintaining the defendant's share ratio in the non-indicted company by converting the above convertible bonds into 97 shares, and that the non-indicted company's total amount of approximately 70,000 square meters and 140,000 won were not confirmed in connection with the designation of the distribution complex and the establishment of the distribution center for the non-indicted 97. The court below decided that the non-indicted company's 97th anniversary of the fact that the above company's 97th anniversary of the fact that the non-indicted company's 97th anniversary of the above 97th anniversary of the fact that the non-indicted company's 97th anniversary of the above 97th anniversary of the fact that the defendant's 197th anniversary of the above 197th anniversary of its closing date.

4. Therefore, the appeal shall be dismissed, and one hundred and twenty days of detention days after the appeal shall be included in the original sentence of the judgment below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Yong-woo (Presiding Justice)