Open Decision Ledger · Capital markets & finance
Whether Information Concerning a Review of Cancellation of Shares Out of Profits After Acquisition of Treasury Shares Constitutes Material Information Not Disclosed to the Public, and the Time at Which Such Information Is Generated
Translated from the Korean original. Read the Korean
Supreme Court, Nov. 26, 2009, 2008Do9623 (judgment)
Case name: 증권거래법위반
Official text on the National Law Information Center
Question
Does information at the stage where a company is reviewing the cancellation of shares out of profits after acquisition of treasury shares as a means of boosting its share price also constitute material information not disclosed to the public under the former Securities and Exchange Act?
Holding
Material information is not generated only when it has been definitively completed; it is generated once it has taken sufficiently concrete shape that a reasonable investor, comparing and assessing materiality and the likelihood of occurrence, would regard it as having significant value. The Supreme Court, having regard to circumstances such as the need to avoid designation as an issue under administration, reversed the judgment of the court below on the ground that this information had already been generated as material information.
Summary of the holding, verbatim
그러한 정보가 객관적으로 명확하고 확실하게 완성된 경우에만 중요정보가 생성되었다고 할 것은 아니고, 합리적인 투자자의 입장에서 그 정보의 중대성 및 사실이 발생할 개연성을 비교 평가하여 유가증권의 거래에 관한 의사결정에서 중요한 가치를 지닌다고 생각할 정도로 구체화되었다면 중요정보가 생성된 것으로 보아야 한다.
Unofficial English translation
It is not the case that important information has been generated only when such information has been completed objectively, clearly and with certainty; rather, if the information has been concretized to such a degree that, from the standpoint of a reasonable investor, weighing and comparing the materiality of the information and the likelihood that the fact will occur, it would be considered to have significant value in making decisions concerning transactions in securities, the important information must be regarded as having been generated.
Disposition
Reversed and remanded Stated in the decision
원심판결을 파기하고 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed and the case is remanded to the Seoul High Court.
Form of the test
Existing test applied Stated in the decision
이미 현실화될 개연성이 충분히 있었고 그 정보의 중대성 역시 인정된다고 보아
Unofficial English translation
since the likelihood of its materialization was already sufficiently high and the materiality of the information is also recognized,
Factors
- 합리적인 투자자가 그 정보의 중대성 및 사실이 발생할 개연성을 비교 평가하여
- 정보가 객관적으로 명확하고 확실하게 완성된 경우에만 중요정보가 생성되었다고 할 것은 아니고
- 유가증권의 거래에 관한 의사결정에서 중요한 가치를 지닌다고 생각할 정도로 구체화되었다면
- 이미 현실화될 개연성이 충분히 있었고 그 정보의 중대성 역시 인정된다
Unofficial English translation
• from the standpoint of a reasonable investor, weighing and comparing the materiality of the information and the likelihood that the fact will occur,
• it is not the case that important information has been generated only when the information has been completed objectively, clearly and with certainty,
• if the information has been concretized to such a degree that it would be considered to have significant value in making decisions concerning transactions in securities,
• the likelihood of its materialization was already sufficiently high and the materiality of the information is also recognized
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2008. 11. 27. 선고 2008도6219 판결
Unofficial English translation
Supreme Court Decision 2008Do6219 decided November 27, 2008
Decisions referred to
[1] 대법원 1995. 6. 30. 선고 94도2792 판결(공1995하, 2689), 대법원 2006. 5. 11. 선고 2003도4320 판결(공2006상, 1079), 대법원 2008. 11. 27. 선고 2008도6219 판결(공2008하, 1840)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Where several share price support measures were under review at the same time, can information that one of those measures was under review also be regarded as having been generated as material information?
This reading will be rechecked if the Supreme Court's holding on the concept of material information not disclosed to the public under Article 174 of the Financial Investment Services and Capital Markets Act, or on the time at which information is generated, changes.
Cross-family AI independent reading & axis check
6 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
Compared with an independent reading by another AI model in the same family (GPT-6 Astra), which read only the original text without seeing the first reading, 6 of the 8 axes matched, and 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 “Existing test applied” vs Independent “Elements stated”
As the original text contains both the general requirements for the generation of material information and their application to information concerning the review of the cancellation of treasury shares, the first reading may place weight on the concrete application and the independent reading on the general requirements.
유가증권의 거래에 관한 의사결정에서 중요한 가치를 지닌다고 생각할 정도로 구체화되었다면 중요정보가 생성된 것으로 보아야 한다.Axis 8 (Open question and revisit condition): Primary “Where several share price support measures were under review at the same time, can information that one of those measures was under review also be regarded as having been generated as material information?” vs Independent “At what concrete stage of the review of the cancellation of shares out of profits after acquisition of treasury shares are the requirements for the generation of material information satisfied?”
The first reading asks whether information concerning a particular measure is generated where several alternatives are being reviewed in parallel, whereas the independent reading asks at what concrete stage the review must have progressed.
그러한 정보가 객관적으로 명확하고 확실하게 완성된 경우에만 중요정보가 생성되었다고 할 것은 아니고, 합리적인 투자자의 입장에서 그 정보의 중대성 및 사실이 발생할 개연성을 비교 평가하여 유가증권의 거래에 관한 의사결정에서 중요한 가치를 지닌다고 생각할 정도로 구체화되었다면 중요정보가 생성된 것으로 보아야 한다.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 the fact that Defendant 1, who was in charge of corporate public relations and share management of the Non-indicted 1 company, informed Defendant 2 around mid-January of 2004 that the company was reviewing the cancellation of shares out of profits after acquisition of treasury shares, yet held that it did not constitute material information, on the ground that whether it would actually be carried out was highly fluid and indeterminate at the time, so that it could not be said that there was a substantial likelihood, or that it had a significant effect on investment judgment.
Supreme Court standard: The Supreme Court cited that shares with a par value of 1,000 won had fallen below 400 won since January 2, 2004, so that support of the share price was desperately needed in order to avoid designation as an issue under administration; that after the treasury share trust and the par value split had failed, Defendant 1, the executive in charge, presented the measure after substantial review over a considerable period and instructed that preparations be made; and that there was no great likelihood that another measure would be adopted, and that in fact a resolution of the board of directors and a public disclosure were made on February 11, 2004. Holding that the materiality of the information and the likelihood of its realization were established, it reversed and remanded the judgment of the court below, holding that the information had already been generated as material information not disclosed to the public in mid-January of 2004.
Distinguishing conditions
- Where the company's internal discussions remained a vague idea, with no instruction from the executive in charge and no practical preparation
- Where a considerable possibility remained that a measure other than the one under review would be adopted
- Where the information had already become known to the market through public disclosure or press reports before it was conveyed
Record verification notes
Before asserting the point in time at which material information was generated, one first checks, by reference to internal approval documents and board materials, the stage of the company's internal review at the time the information was conveyed and whether practical instructions were given, the existence of other alternatives and the manner in which they were actually adopted thereafter.
From the official text
Points at issue
[1] 미공개정보의 이용행위 금지에 관한 구 증권거래법 제188조의2 제2항에 정한 ‘투자자의 투자판단에 중대한 영향을 미칠 수 있는 정보’의 의미 및 그 정보의 생성시기 [2] 특정 회사가 주가 부양 방법으로 ‘자사주 취득 후 이익소각’을 검토하고 있다는 정보가 구 증권거래법 제188조의2 제1항에서 정한 ‘공개되지 아니한 중요한 정보’에 해당한다고 한 사례
Unofficial English translation
[1] Meaning of 'information that may have a significant impact on an investor's investment judgment' as provided in Article 188-2 (2) of the former Securities and Exchange Act concerning the prohibition on the use of undisclosed information, and the time at which such information is generated [2] A case in which information that a particular company was considering 'acquisition of treasury shares followed by cancellation against retained earnings' as a means of raising its stock price was held to constitute 'important information not yet disclosed' under Article 188-2 (1) of the former Securities and Exchange Act
Summary of the holding
[1] 구 증권거래법(2007. 8. 3. 법률 제8635호로 공포되어 2009. 2. 4. 시행된 자본시장과 금융투자업에 관한 법률 부칙 제2조로 폐지) 제188조의2 제1항의 ‘중요한 정보’의 인정 기준인 같은 조 제2항의 ‘투자자의 투자판단에 중대한 영향을 미칠 수 있는 정보’란 법인의 경영·재산 등에 관하여 중대한 영향을 미칠 사실들 가운데에서 합리적인 투자자가 그 정보의 중대성 및 사실이 발생할 개연성을 비교 평가하여 판단할 경우 유가증권의 거래에 관한 의사결정에서 중요한 가치를 지닌다고 생각하는 정보를 가리킨다. 한편 일반적으로 법인 내부에서 생성되는 중요정보라는 것이 갑자기 한꺼번에 완성되지 아니하고 여러 단계를 거치는 과정에서 구체화되는 것이므로, 그러한 정보가 객관적으로 명확하고 확실하게 완성된 경우에만 중요정보가 생성되었다고 할 것은 아니고, 합리적인 투자자의 입장에서 그 정보의 중대성 및 사실이 발생할 개연성을 비교 평가하여 유가증권의 거래에 관한 의사결정에서 중요한 가치를 지닌다고 생각할 정도로 구체화되었다면 중요정보가 생성된 것으로 보아야 한다. [2] 특정 회사가 주가 부양 방법으로 ‘자사주 취득 후 이익소각’을 검토하고 있다는 정보가, 제반 사정에 비추어 이미 현실화될 개연성이 충분히 있었고 그 정보의 중대성 역시 인정된다고 보아 구 증권거래법(2007. 8. 3. 법률 제8635호로 공포되어 2009. 2. 4. 시행된 자본시장과 금융투자업에 관한 법률 부칙 제2조로 폐지) 제188조의2 제1항에서 정한 ‘공개되지 아니한 중요한 정보’에 해당한다고 한 사례.
Order
원심판결을 파기하고 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed and the case is remanded to the Seoul High Court.
Provisions referred to
[1] 구 증권거래법(2007. 8. 3. 법률 제8635호로 공포되어 2009. 2. 4. 시행된 자본시장과 금융투자업에 관한 법률 부칙 제2조로 폐지) 제188조의2 제1항, 제2항(현행 자본시장과 금융투자업에 관한 법률 제174조 제1항 참조) [2] 구 증권거래법(2007. 8. 3. 법률 제8635호로 공포되어 2009. 2. 4. 시행된 자본시장과 금융투자업에 관한 법률 부칙 제2조로 폐지) 제186조 제1항 제9호(현행 자본시장과 금융투자업에 관한 법률 제161조 제1항 제5호 참조), 제11호, 제188조의2 제1항, 제2항(현행 자본시장과 금융투자업에 관한 법률 제174조 제1항 참조)
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.
Back to the ledger