Open Decision Ledger · Capital markets & finance
Whether manipulation of the listing reference price of newly listed shares constitutes a purchase or sale transaction that causes a change in market price or misleads others into believing that trading is brisk
Translated from the Korean original. Read the Korean
Supreme Court, Oct. 25, 1994, 93Do2516 (judgment)
Case name: 주식회사의외부감사에관한법률위반·증권거래법위반
Official text on the National Law Information Center
Question
Does an act of placing high-priced buy orders through fictitious name accounts on the day of initial listing, thereby raising the listing reference price, constitute market manipulation under Article 105 (2), subparagraph 1 of the Securities and Exchange Act?
Holding
A purchase or sale transaction that causes a change in market price means the artificial manipulation of a price formed by supply and demand; therefore, newly listed shares that have no formed price do not fall within that provision even if the act affected the listing reference price. The act in this case, in which orders were placed for only 740 shares out of a total of 1,840,000 issued shares, is also difficult to regard as an act that misled others into believing that trading was brisk.
Summary of the holding, verbatim
최초로 상장되는 주식의 경우에는 기형성된 주식가격이 없으므로 비록 상장 당일 매매거래의 가격제한폭의 적용기준인 상장기준가에 영향을 미치는 매매거래라 할지라도 이에 해당한다고 볼 수 없다.
Unofficial English translation
In the case of a stock that is newly listed for the first time, there is no previously formed stock price, and thus, even if it is a securities transaction that affects the listing base price, which is the criterion for applying the price limit range for the trading of securities on the day of listing, it cannot be regarded as corresponding thereto.
Disposition
Dismissed Stated in the decision
상고를 모두 기각한다.
Unofficial English translation
All appeals are dismissed.
Form of the test
Elements stated Stated in the decision
유가증권시장에서 수요·공급의 원칙에 의하여 형성된 유가증권의 가격을 인위적으로 상승 또는 하락시키는 등의 조작을 가하는 매매거래를 말하는 것으로서
Unofficial English translation
referring to a securities transaction that imposes manipulation, such as artificially raising or lowering the price of securities formed in the securities market according to the principles of supply and demand
Factors
- 당해 유가증권의 성격, 발행주식의 총수, 종전 및 당시의 거래상황, 증권시장의 상황
- 기형성된 주식가격이 없으므로
- 그 후 계속적인 거래행위에 관여한 바 없고
- 당일 총 매수주문이 750주인데도 매매계약이 체결된 것이 540주 정도라면
Unofficial English translation
• the nature of the securities in question, the total number of issued shares, the trading circumstances before and at the time, and the circumstances of the securities market
• because there is no previously formed stock price
• and thereafter was not involved in any continuous trading activity
• although the total purchase orders that day were 750 shares, sales contracts were concluded for only approximately 540 shares
Relation to precedent
Cannot be determined Not in the decision
Decisions referred to
None listed
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
How is it to be determined whether an act of manipulating the listing reference price that does not constitute market manipulation may be regulated under other unfair trading provisions?
This reading is to be re-examined if the method of determining the reference price of newly listed shares or the prohibition on market manipulation is amended.
Cross-family AI independent reading & axis check
6 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
A comparison with an independent reading by another family of AI (GPT-6 Astra), which read only the original text without seeing the primary reading, showed agreement on 6 of the 8 axes, while the readings diverged on Axis 4 (Form of the test) and Axis 8 (Open question and revisit condition).
Axis 4 (Form of the test): Primary “Elements stated” vs Independent “Circumstances weighed”
Because the original text sets out a definition for price-changing acts that presupposes a formed price, while requiring a weighing of the various circumstances for acts misleading others into believing that trading is brisk, focusing on each respectively may lead to different readings of Elements stated and Circumstances weighed.
당해 유가증권의 성격, 발행주식의 총수, 종전 및 당시의 거래상황, 증권시장의 상황 등을 종합적으로 고려하여 판단하여야 한다.Axis 8 (Open question and revisit condition): Primary “How is it to be determined whether an act of manipulating the listing reference price that does not constitute market manipulation may be regulated under other unfair trading provisions?” vs Independent “From what point may additional transactions, after a share price has been formed through trading on the day of initial listing, constitute an act causing a change in market price?”
The primary reading asks about the possibility of regulating manipulation of the listing reference price under other unfair trading provisions, while the independent reading asks from what point additional transactions after price formation on the listing day constitute an act causing a change in market price.
최초로 상장되는 주식의 경우에는 기형성된 주식가격이 없으므로 비록 상장 당일 매매거래의 가격제한폭의 적용기준인 상장기준가에 영향을 미치는 매매거래라 할지라도 이에 해당한다고 볼 수 없다.Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below found that Defendant 1 placed buy orders for 100 shares through one fictitious name account and Defendant 3 placed buy orders for 640 shares through six fictitious name accounts, and that they were not involved in continuous trading; that only 540 of a total of 750 shares ordered were executed; that the act is therefore difficult to regard as an act misleading others into believing that trading was brisk; and that, since newly listed shares have no formed market price, manipulation of the listing reference price does not constitute a purchase or sale transaction that causes a change in market price. On that basis it pronounced Defendant 1 not guilty. It found Defendant 2 guilty of the charged offense of violating the Act on the External Audit of Stock Companies, etc.
Supreme Court standard: The Supreme Court, finding that the disposition of the court below was proper in accordance with the legal principle, dismissed the prosecution's final appeal, and also dismissed Defendant 2's final appeal on the ground that there was no violation of law, such as a violation of the rules of evidence.
Distinguishing conditions
- Where the market price of shares already listed and possessing a price formed in the market was artificially manipulated
- Where the scale of the buy orders was substantial in light of the total number of issued shares or the trading volume of the day, and was followed by continuous trading
- Where repeated fictitious trading (wash sales) through fictitious name accounts created the appearance that trading was brisk
Record verification notes
Before asserting the same conclusion, it needs to be checked whether the shares in question had a formed market price at the time of the transaction, and what proportion the size of the orders bore to the total number of issued shares and the trading volume.
From the official text
Points at issue
가. 증권거래법 제105조 제2항 제1호의 “유가증권의 매매거래가 성황을 이루고 있는 듯이 오인하게” 하는 유가증권의 매매거래에 해당하는지 여부에 관한 판단기준 나. 같은 호의 “유가증권의 시세를 변동시키는 매매거래행위”의 의미 및 최초로 상장되는 주식의 경우 이에 해당하는지 여부 다. 상장 당시 총 발행주식수가 184만주에 이르는 회사의 주식에 대하여 그 대표이사 등이 가명계좌를 통하여 도합 740주의 매수주문을 냈을 뿐 그 후 계속적인 거래행위에 관여한 바 없고 당일 총 매수주문이 750주인데도 매매계약이 체결된 것이 540주 정도라면, “유가증권의 매매거래가 성황을 이루고 있는 듯이 오인하게” 한 행위로 보기 어렵다고 한 사례
Unofficial English translation
a. Criteria for determining whether a transaction constitutes a securities transaction that causes one to misapprehend that the purchase and sale of securities is booming, within the meaning of Article 105, paragraph (2), subparagraph 1 of the Securities and Exchange Act; b. The meaning of "a securities transaction that causes the market price of securities to fluctuate" under the same subparagraph, and whether it applies in the case of a stock that is newly listed for the first time; c. In the case of the stock of a company whose total number of issued shares at the time of listing reached 1,840,000 shares, where its representative director, etc. placed purchase orders totaling 740 shares through accounts in assumed names and thereafter was not involved in any continuous trading activity, and where, although the total purchase orders that day were 750 shares, sales contracts were concluded for only approximately 540 shares — a case where it was held difficult to regard the act as one causing one to misapprehend that the purchase and sale of securities is booming.
Summary of the holding
가. 증권거래법 제105조 제2항 제1호의 “유가증권의 매매거래가 성황을 이루고 있는 듯이 오인하게” 하는 유가증권의 매매거래에 해당하는지의 여부에 관하여는 당해 유가증권의 성격, 발행주식의 총수, 종전 및 당시의 거래상황, 증권시장의 상황 등을 종합적으로 고려하여 판단하여야 한다. 나. 같은 호의 “유가증권의 시세를 변동시키는 매매거래행위”라 함은 유가증권시장에서 수요·공급의 원칙에 의하여 형성된 유가증권의 가격을 인위적으로 상승 또는 하락시키는 등의 조작을 가하는 매매거래를 말하는 것으로서, 최초로 상장되는 주식의 경우에는 기형성된 주식가격이 없으므로 비록 상장 당일 매매거래의 가격제한폭의 적용기준인 상장기준가에 영향을 미치는 매매거래라 할지라도 이에 해당한다고 볼 수 없다. 다. 상장 당시 총 발행주식수가 184만 주에 이르는 회사의 주식에 대하여 그 대표이사 등이 가명계좌를 통하여 도합 740주의 매수주문을 냈을 뿐 그 후 계속적인 거래행위에 관여한 바 없고 당일 총 매수주문이 750주인데도 매매계약이 체결된 것이 540주 정도라면 “유가증권의 매매거래가 성황을 이루고 있는 듯이 오인하게” 한 행위로 보기 어렵다고 한 사례.
Order
상고를 모두 기각한다.
Unofficial English translation
All appeals are dismissed.
Provisions referred to
증권거래법 제105조 제2항 제1호, 제208조 제3호
Read 2026-10-16 · Cross-read 2026-10-16. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
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