Open Decision Ledger · Capital markets & finance
Whether a Disclosure That Faithfully Reflects the Content of a Contract Constitutes an Unfair Means of Unfair Trading
Translated from the Korean original. Read the Korean
Supreme Court, Apr. 26, 2018, 2017Do19019 (judgment)
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: 자본시장과금융투자업에관한법률위반·횡령
Official text on the National Law Information Center
Question
Even where the content of a disclosure faithfully reflects the content of a contract, so that the entry itself is not false, may it constitute an unfair means, scheme, or artifice under Article 178, paragraph (1), subparagraph 1 of the Financial Investment Services and Capital Markets Act?
Holding
An unfair means, scheme, or artifice refers to any means, scheme, or artifice recognized as unfair in light of generally accepted social norms. The Supreme Court held that, even if the disclosure entry itself is difficult to regard as false, it falls within this category where, when combined with other means or with the content, purpose, or method of the transaction, it may be regarded as unfair in light of generally accepted social norms, and thereby upheld the guilty determination of the court below.
Points at issue, verbatim
어떠한 공시 내용이 계약의 내용을 그대로 반영하여 기재 자체만으로는 허위로 보기 어려우나 다른 수단이나 거래의 내용, 목적, 방식 등과 결부되어 사회통념상 부정하다고 볼 수 있는 경우가 이에 해당하는지 여부(적극)
Unofficial English translation
whether a case in which certain disclosure content faithfully reflects the content of a contract and thus is difficult to regard as false on the basis of the wording itself, but which, when combined with other means or with the content, purpose or method of the transaction, may be regarded as unfair in light of social norms, falls within this category (affirmative)
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
원심이 그 판시와 같은 이유를 들어 이 사건 공소사실 중 자본시장법 위반의 점(이유무죄 부분 제외)을 유죄로 판단한 것은 앞서 본 법리에 따른 것으로서 정당하다.
Unofficial English translation
The court below's finding the defendant guilty, for the reasons stated in its holding, of the violation of the Financial Investment Services and Capital Markets Act among the facts charged in this case (except the part found not guilty in the reasoning) is proper as it follows the legal principle stated above.
Factors
- 공판조서의 증명력
- 자본시장과 금융투자업에 관한 법률 제178조에서 부정거래행위를 금지하는 취지
- 계약의 내용을 그대로 반영하여 기재 자체만으로는 허위로 보기 어려우나
- 다른 수단이나 거래의 내용, 목적, 방식 등과 결부되어 사회통념상 부정하다고 볼 수 있는 경우
Unofficial English translation
• the probative value of the transcript of trial proceedings
• the purpose for which the Financial Investment Services and Capital Markets Act prohibits unfair trading in Article 178
• faithfully reflects the content of a contract and thus is difficult to regard as false on the basis of the wording itself,
• when combined with other means or with the content, purpose or method of the transaction, may be regarded as unfair in light of social norms
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2013. 8. 22. 선고 2013도4843 판결
Unofficial English translation
Supreme Court Decision 2013Do4843 decided August 22, 2013
Decisions referred to
[1] 대법원 2003. 10. 10. 선고 2003도3282 판결(공2003하, 2214), 대법원 2012. 6. 14. 선고 2011도12571 판결 / [2] 대법원 2013. 8. 22. 선고 2013도4843 판결, 대법원 2017. 12. 22. 선고 2017도12649 판결(공2018상, 388)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Where the disclosure entry itself is true, up to what point does the limit lie as to what degree of ancillary means or transaction method must be combined with it before it can be evaluated as unfair in light of generally accepted social norms?
If the wording of Article 178, paragraph (1), subparagraph 1 of the Financial Investment Services and Capital Markets Act is amended, or if subsequent judgments are handed down concerning the relationship between a truthful disclosure and unfair means, 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
When 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, 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 “Circumstances weighed”
Since the Holdings call for determining unfairness by combining the disclosure with other means and with the content, purpose, and method of the transaction, the reading may differ depending on whether weight is placed on the application to that disclosure or on the overall assessment of the various circumstances.
다른 수단이나 거래의 내용, 목적, 방식 등과 결부되어 사회통념상 부정하다고 볼 수 있는 경우Axis 8 (Open question and revisit condition): Primary “Where the disclosure entry itself is true, up to what point does the limit lie as to what degree of ancillary means or transaction method must be combined with it before it can be evaluated as unfair in light of generally accepted social norms?” vs Independent “Up to what extent must the acquirer's financing structure be disclosed before it can be regarded as having prevented a misunderstanding as to financial standing?”
The primary reading asks as to the general limit at which ancillary means combined with a truthful disclosure become unfair, while the independent reading asks to what extent the acquirer's financing structure must be disclosed in order to prevent a misunderstanding.
어떠한 공시 내용이 계약의 내용을 그대로 반영하여 기재 자체만으로는 허위로 보기 어려우나 다른 수단이나 거래의 내용, 목적, 방식 등과 결부되어 사회통념상 부정하다고 볼 수 있는 경우가 이에 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 found the defendant guilty, holding that although the defendant personally lacked financial capacity and was acquiring the shares and management control by mobilizing private bonds, he disclosed the acquisition as if it were being carried out by a foreign-affiliated company with abundant financial capacity and caused news articles to be reported, thereby using a false entry or unfair means regarding an important matter that caused a misunderstanding as to the acquirer's financial standing, and ordered the additional collection (confiscation of criminal proceeds) of 167,900,000 won.
Supreme Court standard: The Supreme Court viewed the guilty determination of the court below for violation of the Financial Investment Services and Capital Markets Act as justifiable, being in accordance with the legal principle concerning the meaning of unfair means, and also found the calculation of the amount to be collected acceptable. In addition, in light of the legal principle of the absolute probative value of a trial record, the Supreme Court held that the litigation proceedings at first instance, conducted by service by public notice in the absence of the defendant, were also lawful, and dismissed the final appeal.
Distinguishing conditions
- A case where the content of the disclosure faithfully reflects the contract and it is difficult to find unfairness in separate means combined therewith or in the content, purpose, or method of the transaction
- A case where there is no report or formation of appearance that induces a market misunderstanding as to the acquiring entity or the source of funds
- A case where the entry in the trial record constitutes an obvious clerical error and therefore absolute probative value is not recognized
Record verification notes
Before asserting the same conclusion, it should be confirmed whether the means or transaction structure used together with the disclosure was in fact capable of causing investors to misunderstand important matters such as the acquirer's financial standing, and whether the content of the disclosure itself had already sufficiently revealed the substance.
From the official text
Points at issue
[1] 공판조서의 증명력 [2] 자본시장과 금융투자업에 관한 법률 제178조에서 부정거래행위를 금지하는 취지 / 같은 법 제178조 제1항 제1호에서 말하는 ‘부정한 수단, 계획 또는 기교’의 의미 및 어떠한 공시 내용이 계약의 내용을 그대로 반영하여 기재 자체만으로는 허위로 보기 어려우나 다른 수단이나 거래의 내용, 목적, 방식 등과 결부되어 사회통념상 부정하다고 볼 수 있는 경우가 이에 해당하는지 여부(적극)
Unofficial English translation
[1] the probative value of the transcript of trial proceedings [2] the purpose for which the Financial Investment Services and Capital Markets Act prohibits unfair trading in Article 178, and the meaning of 'unfair means, schemes or artifices' as used in subparagraph 1 of paragraph (1) of Article 178 of the same Act, and whether a case in which certain disclosure content faithfully reflects the content of a contract and thus is difficult to regard as false on the basis of the wording itself, but which, when combined with other means or with the content, purpose or method of the transaction, may be regarded as unfair in light of social norms, falls within this category (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
상고를 기각한다.
Unofficial English translation
The appeal is dismissed.
Provisions referred to
[1] 형사소송법 제56조 [2] 자본시장과 금융투자업에 관한 법률 제178조 제1항 제1호, 제443조 제1항 제8호
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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