Open Decision Ledger · Capital markets & finance
Right to Claim Damages under Article 179 of the Financial Investment Services and Capital Markets Act for an Investor Who Held an Equity-Linked Security to Maturity Where the Price of the Underlying Asset Was Manipulated
Translated from the Korean original. Read the Korean
Supreme Court, Apr. 9, 2015, 2014Ma188 (ruling)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 소송허가신청
Official text on the National Law Information Center
Question
In an equity-linked security in which whether redemption occurs is determined by the price of the underlying asset at a specific point in time, may an investor who merely held the product until maturity claim damages under Article 179(1) of the Financial Investment Services and Capital Markets Act in respect of an act that influenced the fulfillment of the condition by wrongful means?
Holding
Where, in light of generally accepted social norms, an act influences the exercise of a right or the fulfillment of a condition by wrongful means, it constitutes a violation of Article 178(1) subparagraph 1 of the Financial Investment Services and Capital Markets Act. The Supreme Court held that an investor who suffers damage as a result, because the content of the rights and obligations or the settlement amount changes, may claim damages under Article 179(1), even if the investor did not actively trade the product and merely held it.
Points at issue, verbatim
사회통념상 부정하다고 인정되는 수단 등을 사용하여 한 권리행사나 조건성취에 영향을 주는 행위가 자본시장과 금융투자업에 관한 법률 제178조 제1항 제1호를 위반한 부정행위에 해당하는지 여부(적극)
Unofficial English translation
whether an act affecting the exercise of a right or the satisfaction of a condition by using means recognized as unfair in light of social norms falls within an unfair act in violation of Article 178, paragraph (1), subparagraph 1 of the Financial Investment Services and Capital Markets Act (affirmative)
Disposition
Reversed and remanded Stated in the decision
원심결정을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The order of the court below is reversed, and the case is remanded to the Seoul High Court.
Form of the test
Elements stated Stated in the decision
그 위반행위로 인하여 그 금융투자상품 투자자의 권리나 의무의 내용이 변경되거나 결제되는 금액이 달라져 투자자가 손해를 입었다면 그 투자자는 그 부정거래행위자에 대하여 자본시장법 제179조 제1항에 따라 손해배상을 청구할 수 있다고 할 것이다.
Unofficial English translation
if, by reason of such violating act, the content of the rights or obligations of the investor in the financial investment product is altered or the amount settled differs, so that the investor has suffered loss, it may be said that the investor may claim damages from the unfair trading actor pursuant to Article 179, paragraph (1) of the Financial Investment Services and Capital Markets Act.
Factors
- 자본시장과 금융투자업에 관한 법률 제178조에서 금지하고 있는 부정행위에 해당하는지 판단하는 기준
- 특정 시점의 기초자산 가격 등에 따라 권리행사 또는 조건성취 여부가 결정되거나 금전 등이 결제되는 구조로 되어 있는 금융투자상품
- 사회통념상 부정하다고 인정되는 수단 등을 사용하여 한 권리행사나 조건성취에 영향을 주는 행위
- 위반행위로 인하여 손해를 입은 투자자가 부정거래행위자에 대하여 자본시장과 금융투자업에 관한 법률 제179조 제1항에 따라 손해배상을 청구할 수 있는지 여부(적극)
Unofficial English translation
• The criteria for determining whether conduct falls within an unfair act prohibited by Article 178 of the Financial Investment Services and Capital Markets Act
• A financial investment product structured such that whether a right is exercised or a condition is satisfied, or money or the like is settled, is determined by the price of the underlying asset at a specific point in time
• An act affecting the exercise of a right or the satisfaction of a condition by using means recognized as unfair in light of social norms
• Whether an investor who has suffered loss due to the violating act may claim damages from the unfair trading actor pursuant to Article 179, paragraph (1) of the Financial Investment Services and Capital Markets Act (affirmative)
Relation to precedent
States a new standard Read from the decision
특정 시점의 기초자산 가격 등에 따라 권리행사 또는 조건성취 여부가 결정되거나 금전 등이 결제되는 구조로 되어 있는 금융투자상품의 경우
Unofficial English translation
In the case of a financial investment product structured such that whether a right is exercised or a condition is satisfied, or money or the like is settled, is determined by the price of the underlying asset at a specific point in time
Decisions referred to
None listed
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
By what specific circumstances is it determined whether a large-scale sale of the underlying asset by the counterparty near the close of the market on the redemption reference date constitutes a wrongful means in light of generally accepted social norms rather than a legitimate risk-hedging transaction?
If the requirements under Article 178 or Article 179 of the Financial Investment Services and Capital Markets Act or the permission requirements under Article 3 of the Securities-Related Class Action Act are amended, this reading will be re-examined.
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 family (GPT-6 Astra), which read only the original text without seeing the primary reading, 6 of the 8 axes agreed, 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”
Since the Holdings set out together the standard for judging wrongful conduct, the influence on the fulfillment of a condition by wrongful means, and the requirements for damages, the reading may differ depending on whether attention is paid to the comprehensive assessment of the former or to the structure of requirements of the latter.
자본시장과 금융투자업에 관한 법률 제178조에서 금지하고 있는 부정행위에 해당하는지 판단하는 기준Axis 8 (Open question and revisit condition): Primary “By what specific circumstances is it determined whether a large-scale sale of the underlying asset by the counterparty near the close of the market on the redemption reference date constitutes a wrongful means in light of generally accepted social norms rather than a legitimate risk-hedging transaction?” vs Independent “Whether the large-scale sale of the underlying asset in this case actually constitutes an unfair transaction, and how much the investor's damage thereby amounts to.”
The primary reading asks for the circumstances that distinguish risk-hedging transactions from wrongful large-scale sales, while the independent reading asks whether the large-scale sale in question was actually wrongful and the amount of damage.
사회통념상 부정하다고 인정되는 수단 등을 사용하여 한 권리행사나 조건성취에 영향을 주는 행위가 자본시장과 금융투자업에 관한 법률 제178조 제1항 제1호를 위반한 부정행위에 해당하는지 여부(적극)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 (the Seoul High Court, 2013Ra1426) held that the appellant, after acquiring the equity-linked security, held it merely in a passive manner until maturity and did not actively trade it, such as by buying, selling, or exchanging it or providing it as collateral, as a result of the counterparty's large-scale sale; on that ground, the appellant could not exercise the right to claim damages under Article 179, and the application for permission to sue failed to meet the requirements of Article 3 of the Securities-Related Class Action Act.
Supreme Court standard: The Supreme Court held that, given that the structure is one in which the redemption amount is determined by the closing price of the underlying asset on the redemption reference date, a claim asserting that the fulfillment of the redemption condition failed because the stock price was artificially lowered and that only part of the invested funds was redeemed constitutes a claim for damages under Article 179(1). It reversed and remanded, holding that the determination of the court below involved a misapprehension of legal principles concerning the scope of holders of the right to claim damages.
Distinguishing conditions
- Where the structure is such that the exercise of rights in, or the settlement amount of, a financial investment product is not linked to the price of the underlying asset at a specific point in time
- Where the sale of the underlying asset is assessed as an ordinary risk-hedging transaction that cannot be regarded as a wrongful means or artifice in light of generally accepted social norms
- Where the investor's damage is unrelated to any change in the content of the rights and obligations or any fluctuation in the settlement amount caused by the violating act
Record verification notes
Before asserting the same conclusion, first check, in light of the circumstances before and after the act and the relationship between the investor and the actor, whether the sale in question was a wrongful means intended to influence the fulfillment of the redemption condition or an ordinary transaction such as the performance of a hedging obligation.
From the official text
Points at issue
자본시장과 금융투자업에 관한 법률 제178조에서 금지하고 있는 부정행위에 해당하는지 판단하는 기준 / 특정 시점의 기초자산 가격 등에 따라 권리행사 또는 조건성취 여부가 결정되거나 금전 등이 결제되는 구조로 되어 있는 금융투자상품의 경우, 사회통념상 부정하다고 인정되는 수단 등을 사용하여 한 권리행사나 조건성취에 영향을 주는 행위가 자본시장과 금융투자업에 관한 법률 제178조 제1항 제1호를 위반한 부정행위에 해당하는지 여부(적극) 및 위반행위로 인하여 손해를 입은 투자자가 부정거래행위자에 대하여 자본시장과 금융투자업에 관한 법률 제179조 제1항에 따라 손해배상을 청구할 수 있는지 여부(적극)
Unofficial English translation
The criteria for determining whether conduct falls within an unfair act prohibited by Article 178 of the Financial Investment Services and Capital Markets Act / In the case of a financial investment product structured such that whether a right is exercised or a condition is satisfied, or money or the like is settled, is determined by the price of the underlying asset at a specific point in time, whether an act affecting the exercise of a right or the satisfaction of a condition by using means recognized as unfair in light of social norms falls within an unfair act in violation of Article 178, paragraph (1), subparagraph 1 of the Financial Investment Services and Capital Markets Act (affirmative), and whether an investor who has suffered loss due to the violating act may claim damages from the unfair trading actor pursuant to Article 179, paragraph (1) of the Financial Investment Services and Capital Markets Act (affirmative)
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
원심결정을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The order of the court below is reversed, and the case is remanded to the Seoul High Court.
Provisions referred to
증권시장과 금융투자업에 관한 법률 제178조, 제179조 제1항
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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