Open Decision Ledger · Capital markets & finance
Interpretive exception to the liability to return short-swing profits upon a major shareholder's disposal of shares after abandoning a hostile takeover
Translated from the Korean original. Read the Korean
Supreme Court, May 28, 2004, 2003Da60396 (judgment)
Case name: 부당이득금
Official text on the National Law Information Center
Question
Where a major shareholder who had attempted a hostile takeover abandoned the acquisition due to the management's resistance and disposed of the shares on the open market within six months, may this be regarded as an interpretive exception to the return of short-swing profits?
Holding
Even for grounds not set out in the Enforcement Decree, the court may exclude the application for transactions of a type where there is objectively no possibility whatsoever of improper use of internal information. However, the Supreme Court held that the sale in this case was a transaction voluntarily decided upon by the defendant himself, and that the mere appearance of being a hostile acquirer does not exclude the possibility of access to internal information, and therefore the defendant was liable to return the profits.
Summary of the holding, verbatim
같은법시행령 제83조의6에서 정한 예외사유에 해당하지 않더라도 객관적으로 볼 때 내부정보를 부당하게 이용할 가능성이 전혀 없는 유형의 거래에 대하여는 법원이 같은 법 제188조 제2항의 매수 또는 매도에 해당하지 아니하는 것으로 보아 그 적용을 배제할 수는 있다.
Unofficial English translation
Even if the transaction does not fall under any ground for exception prescribed in Article 83-6 of the Enforcement Decree of the same Act, with respect to a type of transaction in which, viewed objectively, there is no possibility whatsoever of the unfair use of inside information, the court may regard it as not constituting a purchase or sale under Article 188(2) of the same Act and exclude its application.
Disposition
Dismissed Stated in the decision
상고를 기각한다.
Unofficial English translation
The appeal is dismissed.
Form of the test
Existing test applied Read from the decision
이는 증권거래법 제188조 제2항의 적용대상인 매도에 해당하여 단기매매차익의 반환책임을 지게 된다고 한 사례
Unofficial English translation
A case in which it was held that this constitutes a sale subject to Article 188(2) of the Securities and Exchange Act, thereby incurring liability to return the short-swing profit
Factors
- 내부자가 실제로 미공개 내부정보를 이용하였는지 여부나 내부자에게 미공개 내부정보를 이용하여 이득을 취하려는 의사가 있었는지 여부를 묻지 않고
- 증권거래법시행령 제83조의6에서 정한 예외사유는 한정적으로 열거된 것으로서
- 객관적으로 볼 때 내부정보를 부당하게 이용할 가능성이 전혀 없는 유형의 거래
- 대상회사 경영진의 저항에 부딪혀 인수를 단념하고 대량으로 취득한 주식을 공개시장에서 처분한 경우
Unofficial English translation
• without inquiring into whether the insider actually used undisclosed inside information or whether the insider had an intent to profit by using undisclosed inside information,
• the grounds for exception prescribed in Article 83-6 of the Enforcement Decree of the Securities and Exchange Act are enumerated in a limited manner,
• a type of transaction in which, viewed objectively, there is no possibility whatsoever of the unfair use of inside information
• a case in which the acquisition was given up in the face of resistance from the management of the target company and a large number of shares acquired thereby were disposed of in the open market
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2004. 2. 12. 선고 2002다69327 판결, 대법원 2004. 2. 13. 선고 2001다36580 판결
Unofficial English translation
Supreme Court Decision 2002Da69327 decided February 12, 2004, Supreme Court Decision 2001Da36580 decided February 13, 2004
Decisions referred to
[1] 대법원 2004. 2. 12. 선고 2002다69327 판결, 대법원 2004. 2. 13. 선고 2001다36580 판결(공2004상, 451)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
At what point and to what extent must the hostile relationship between a large-volume purchaser of shares and the management reach before the transaction may be regarded as a type in which the possibility of access to internal information is completely excluded?
If the underlying provision of the short-swing profit disgorgement system or the grounds for exception prescribed by the Enforcement Decree are amended, this reading will be checked again.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
When compared with an independent reading by another AI model (GPT-6 Astra), which read only the original text without seeing the primary reading, 7 of the 8 axes agreed, and the readings diverged on axis 4 (Form of the test).
Axis 4 (Form of the test): Primary “Existing test applied” vs Independent “Elements stated”
Because the original text presents both the general requirements for recognizing the exception and the application to the sale in this case, the primary reading may place weight on Existing test applied, while the independent reading may place weight on the requirements for the exception.
객관적으로 볼 때 내부정보를 부당하게 이용할 가능성이 전혀 없는 유형의 거래Raw 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: Although the court below took the view that, even where not expressly stated in the Enforcement Decree, the return provision does not apply where, by the type of the transaction, there is objectively no possibility of use of internal information, it held that this case does not fall within the exception, on the ground that the attempted takeover and its abandonment were not disclosed to general investors, and that it cannot be categorically asserted that the defendant, in the superior position of having monopolized the acquisition information, had no intention of enjoying profits by selling the shares at an abnormally high price.
Supreme Court standard: The Supreme Court, while stating that the court below's reasoning was somewhat insufficient, clarified that the possibility of improper use must be determined on the basis of the voluntariness of the transaction and the possibility of access to internal information. Since the defendant's sale was an open-market transaction voluntarily decided upon after weighing economic gains and losses, and the mere appearance of being a hostile acquirer does not exclude the possibility of access, the conclusion of the court below recognizing the duty of return was correct, and the Supreme Court dismissed the final appeal.
Distinguishing conditions
- Where the disposal of shares was effected by statute or compulsory execution or the like, so that it cannot be regarded as having been voluntarily decided upon by the insider—a type of involuntary transaction
- Where it is objectively evident that, in light of the specific circumstances at the relevant time, the possibility of the acquirer's access to the company's internal information was completely excluded
- Where the purchase and sale did not take place within six months, or where at the time of the purchase and sale the person was not an insider such as a major shareholder
Record verification notes
Before asserting the same conclusion, first confirm whether the disposal was a voluntary transaction based on the seller's economic judgment, and whether circumstances showing that, beyond the mere appearance of a hostile relationship, the possibility of access to internal information was actually blocked at the relevant time appear in the Records.
From the official text
Points at issue
[1] 증권거래법 제188조 제2항에 규정된 단기매매차익반환제도의 규정 취지 및 같은법시행령 제83조의6에서 정한 예외사유에 해당하지 않더라도 내부정보의 이용가능성이 없는 유형의 거래에 대하여 법원이 해석상의 예외사유로 보아 그 적용을 배제할 수 있는지 여부(적극) [2] 적대적 기업인수를 시도하던 자가 주요주주가 된 후에 대상회사 경영진의 저항에 부딪혀 인수를 단념하고 대량으로 취득한 주식을 공개시장에서 처분한 경우, 이는 증권거래법 제188조 제2항의 적용대상인 매도에 해당하여 단기매매차익의 반환책임을 지게 된다고 한 사례
Unofficial English translation
[1] The legislative purpose of the short-swing profit disgorgement system prescribed in Article 188(2) of the Securities and Exchange Act and whether, with respect to a type of transaction in which there is no possibility of using inside information, the court may, on the ground of an exception by interpretation, exclude the application of the short-swing profit disgorgement system prescribed in Article 188(2) of the Securities and Exchange Act, even if the transaction does not fall under any ground for exception prescribed in Article 83-6 of the Enforcement Decree of the same Act (affirmative) [2] A case in which a person who had attempted a hostile acquisition, having become a major shareholder thereafter, gave up the acquisition in the face of resistance from the management of the target company and disposed of a large number of shares acquired thereby in the open market, and it was held that this constitutes a sale subject to Article 188(2) of the Securities and Exchange Act, thereby incurring liability to return the short-swing profit
Summary of the holding
[1] 증권거래법 제188조 제2항 소정의 단기매매차익 반환제도는 주권상장법인 또는 협회등록법인의 내부자가 6월 이내의 단기간에 그 법인의 주식 등을 사고 파는 경우 미공개 내부정보를 이용하였을 개연성이 크다는 점에서 거래 자체는 허용하되 그 대신 내부자가 실제로 미공개 내부정보를 이용하였는지 여부나 내부자에게 미공개 내부정보를 이용하여 이득을 취하려는 의사가 있었는지 여부를 묻지 않고 내부자로 하여금 그 거래로 얻은 이익을 법인에 반환하도록 하는 엄격한 책임을 인정함으로써 내부자가 미공개 내부정보를 이용하여 법인의 주식 등을 거래하는 행위를 간접적으로 규제하려는 제도라 할 것이고, 따라서 같은 법 제188조 제2항이 적용되지 아니하는 경우로서 같은 조 제8항에 의하여 증권거래법시행령 제83조의6에서 정한 예외사유는 한정적으로 열거된 것으로서 같은법시행령에서 정하지 않는 사유로까지 그 반환책임의 예외사유를 넓힐 것을 예정한 것은 아니라 할 것이지만, 단기매매차익 반환제도의 입법 목적, 같은법시행령 제83조의6에 정해진 예외사유의 성격 그리고 헌법 제23조가 정하는 재산권보장의 취지를 고려하면, 같은법시행령 제83조의6에서 정한 예외사유에 해당하지 않더라도 객관적으로 볼 때 내부정보를 부당하게 이용할 가능성이 전혀 없는 유형의 거래에 대하여는 법원이 같은 법 제188조 제2항의 매수 또는 매도에 해당하지 아니하는 것으로 보아 그 적용을 배제할 수는 있다. [2] 적대적 기업인수를 시도하던 자가 주요주주가 된 후에 대상회사 경영진의 저항에 부딪혀 인수를 단념하고 대량으로 취득한 주식을 공개시장에서 처분한 경우, 이는 증권거래법 제188조 제2항의 적용대상인 매도에 해당하여 단기매매차익의 반환책임을 지게 된다고 한 사례.
Order
상고를 기각한다. 상고비용은 피고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the defendant.
Provisions referred to
[1] 증권거래법 제188조 제2항, 제8항, 증권거래법시행령 제83조의6 [2] 증권거래법 제188조 제2항
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.
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