Can someone who merely passes on money be a co-perpetrator of the offence of taking money for brokering, and what makes matched trading market manipulation? Supreme Court Decision 98Do3051 on 'co-perpetration' and 'the unlawful purpose'

Question

Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes punishes a person who, in connection with brokering a matter belonging to the duties of an officer or employee of a financial company, receives, demands or promises money or other benefit, or causes a third party to give it, or demands or promises that it be given. Article 30 of the Criminal Act punishes each of two or more persons who commit an offence jointly as a principal. Alongside these, Article 188-4(1) of the Securities and Exchange Act, as the decision cites it, prohibits market manipulation, of which matched trading is one kind. Two questions follow: what a third party who is not a party to the brokering must do to fall within the broker-remittance offence, and what elements matched trading must have before it is prohibited and before it is exceptionally allowed.

Decision 98Do3051 raises both questions on appeals by two defendants. Defendant 1 had been convicted as a co-perpetrator of the broker-remittance offence for arranging, with other co-offenders, matched trading that manipulated share prices, agreeing to receive fees for the arrangement, and delivering the fees he received from the client to the co-offenders; he was also convicted of matched trading. Both defendants appealed to the Supreme Court, arguing that the court below had misapprehended the law, misread the facts contrary to the rules of evidence, and omitted reasoning.

Material to check

The statutes are Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, which in the current text read for this brief punishes the receipt, demand or promise of money or other benefit in connection with brokering a matter belonging to the duties of an officer or employee of a financial company, or causing a third party to give it, or demanding or promising that it be given, by imprisonment for up to five years or a fine, and Article 30 of the Criminal Act, which provides that where two or more persons commit an offence jointly, each is punished as a principal of that offence. The decision also cites Article 188-4 of the Securities and Exchange Act as amended by Act No. 5254 of 13 January 1997, together with Article 207-2(ii) of that Act and Articles 83-8 to 83-14 of its Enforcement Decree; the texts read for this brief do not include those provisions, and their content is stated here only as the decision states it.

The decisions are Decision 98Do3051 and the decision it cites on the meaning of brokering: Decision 97Do2609 (26 December 1997), which held that 'brokering' in Article 7 of the Act includes a request, so that conveying the gist of a person's request to the other side, or making the request oneself on that person's behalf, is also brokering.

Possible readings

Read with Article 30 of the Criminal Act, the decision draws a line for the middleman. A third party who is not a party to the brokering and only passes the money or other benefit that is the price of it does not, by that act alone, satisfy the elements of the broker-remittance offence: the offence requires that someone receive, demand or promise the benefit, or cause a third party to give it or demand or promise its giving. But if that third party passes the money with joint intent shared with a party to the brokering, his delivery joins in the offence's execution, and as a co-perpetrator he does not escape liability.

A second reading follows Decision 97Do2609 on the reach of 'brokering'. Brokering means standing between a person and the other side of a given matter to mediate or facilitate it, so the mere conveying of a request qualifies. Decision 98Do3051 does not restate that definition but operates within it: the defendant's conduct was arranging matched trading for others and delivering their fees, and the question the decision answers is whose conduct the delivery makes him answerable for.

A third reading comes from the decision's statement of the elements of matched trading. The parties must agree beforehand and then buy or sell the same securities at the same time and the same price in trading of listed securities or securities registered on the over-the-counter market, and the actor must have the unlawful purpose of making others wrongly believe that the trade is active or otherwise leading them to a mistaken judgement. Even such market manipulation is exceptionally permitted under Article 188-4(3), as the decision states it, where the purpose is to fix or stabilise the price of securities, and then only under strict conditions as to period, price and the persons involved; the securities company must file a notification and report on stabilisation operations or market making, and the Securities Supervisory Board and the stock exchange or the securities association must carry out the corresponding disclosure procedure.

What the decisions held

Decision 98Do3051 dismissed all appeals and credited 100 days of detention after the appeal out of Defendant 1's detention to his principal sentence. The court below, the Seoul High Court in its judgment 98No1417 of 20 August 1998, had convicted Defendant 1 as a co-perpetrator of the broker-remittance offence; the Supreme Court held that its findings and legal judgement were acceptable on the record, and that there was no misreading of the facts through breach of the rules of evidence, no misapprehension of the law on the offence, and no omission of reasoning.

On matched trading, the decision applied the rule to the record and found that Defendant 1 had joined, with trading partners who agreed in advance, in buying and selling a large volume of shares of Non-party Co., Ltd. so that the shares could be sold or bought without a price plunge, that he had not met the requirements for the exceptionally permitted market making or stabilisation operations, and that the record showed he had the unlawful purpose at the time of the act. The decision also distinguished this from so-called matched-off trading, where a securities company that is a member of the stock exchange concludes a large-volume trade through prior notification: the defendant's trade was not of that kind. The conviction was therefore proper.

For Defendant 2, the decision noted that he had appealed from the first-instance judgment on the sole ground that the sentence was unjust, and that the court below dismissed his appeal only because the first-instance sentencing was appropriate. In such a case he could not raise, as a ground of appeal to the Supreme Court, a misreading of the facts or omission of reasoning based on failure to investigate, since no such ground had been argued on appeal. His appeal too was dismissed.

Points left open

The decision states that a third party who merely passes the money does not thereby fall within the elements of the broker-remittance offence. It does not decide whether such a person may nonetheless answer as an aider or under some other provision, and it does not say at what point shared intent must be formed, or how it is to be proved on particular facts.

The decision also leaves the workings of the stabilisation exception open. It describes the strict conditions as to period, price and the persons involved and the notification and disclosure steps that Article 188-4(3) requires, as the decision states them, but gives no test for judging compliance on individual facts, and it only distinguishes matched-off trading by an exchange member securities company with prior notification without settling how far that distinction reaches.

When to reconsider

We revisit this brief if Article 188-4 of the Securities and Exchange Act, or Article 7 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, is amended or re-enacted so that the elements or penalties the decision states no longer match the current text, or if a later decision addresses joint intent in the passing of money or the conditions of the stabilisation exception.

Statutes referred to

• 특정경제범죄가중처벌등에관한법률 제7조
• 형법 제30조
• 증권거래법 제188조의4, 제207조의2
• 증권거래법시행령 제83조의8, 제83조의9, 제83조의10, 제83조의11, 제83조의12, 제83조의13, 제83조의14

Decisions referred to

• 대법원 1998. 12. 8. 선고 98도3051 판결 · Decision ledger
• 대법원 1997. 12. 26. 선고 97도2609 판결 · Decision ledger

Verification status

All texts below were read at the National Law Information Center on 24 October 2026. The decision was read in its published holdings, summary and reasons, the two articles in their current text, and Decision 97Do2609 in its published holdings and summary.