Open Decision Ledger · Criminal law
Market manipulation profit: realised and unrealised gain, purchase-price method
Supreme Court, Oct. 12, 2018, 2018Do8438 (judgment)
Case name: 자본시장과금융투자업에관한법률위반·특정경제범죄가중처벌등에관한법률위반(사기)
Official text on the National Law Information Center
Question
When the value of 'profit obtained from the violation' is calculated under Article 443(1) proviso and (2) of the former Capital Markets and Financial Investment Business Act, must both realised and unrealised profit be included, and how is the realised profit of a price-raising manipulation calculated?
Holding
It includes both. 'Profit obtained from the violation' is all of the profit the actor obtained through the violation, so it covers the profit already realised through a single trade during the manipulation period and the valuation profit in the target shares or subscription rights still held when the manipulation ended. The purchase price depends on why the shares or subscription rights were held: if they were acquired in order to profit from the manipulation, the weighted average of the actual acquisition cost (for subscription rights, the exercise price plus the purchase price of the rights) applies; if they were not, the closing price on the day before the manipulation period applies, because the earlier holding is unrelated to the manipulation. Realised profit is the difference between the sale and purchase unit prices multiplied by the matched quantity, less the costs of disposal, and the sale price is the weighted average of the actual sale proceeds where shares were sold during the period.
Summary of the holding, verbatim
시세조종행위로 주가를 상승시킨 경우 그에 따른 실현이익은 ‘매도단가와 매수단가의 차액에 매매일치수량(매수수량과 매도수량 중 더 적은 수량)을 곱하여 계산한 금액’에서 ‘주식을 처분할 때 든 거래비용’을 공제하여 산정된다.
Unofficial English translation
Where the share price was raised by market manipulation, the realized gains arising therefrom are calculated by deducting 'the transaction costs incurred in disposing of the shares' from 'the amount calculated by multiplying the difference between the sale unit price and the purchase unit price by the matching quantity of purchases and sales (the lesser of the purchase quantity and the sale quantity).'
Disposition
Partly reversed and remanded Stated in the decision
원심판결 중 피고인 1, 피고인 2에 대한 부분을 파기하고, 이 부분 사건을 서울고등법원에 환송한다. 피고인 4, 피고인 3의 상고를 기각한다.
Unofficial English translation
The portion of the judgment of the court below concerning Defendant 1 and Defendant 2 is reversed and remanded to the Seoul High Court. The final appeals of Defendant 4 and Defendant 3 are dismissed.
Form of the test
Elements stated Stated in the decision
‘위반행위로 얻은 이익’은 위반행위로 행위자가 얻은 인과관계에 있는 이익의 전부를 뜻하므로
Unofficial English translation
'Gains obtained from the violation' means all of the gains standing in causation that the actor obtained from the violation, and therefore
Factors
- 시세조종행위 기간 중에 한 구체적 거래로 인하여 이미 발생한 이익
- 시세조종행위 종료 시점 당시 보유 중인 시세조종 대상 주식 또는 신주인수권증권의 평가이익
- 시세조종행위로 이익을 얻기 위해 주식을 취득하였다면 실제 매수가액을 매수수량으로 가중평균한 단가를 매수단가로 적용하고
- 시세조종행위로 이익을 얻기 위해 주식이나 신주인수권증권을 취득한 것이 아니라면, 시세조종기간 전일 주식의 종가를 매수단가로 보아야 한다
Unofficial English translation
• Gains already accrued from a specific transaction made during the period of the market manipulation
• Valuation gains on the shares or new share subscription warrants subject to the market manipulation that were held as of the time the market manipulation ended
• Where shares were acquired in order to obtain gains through market manipulation, the actual purchase price, weighted-averaged by the purchase quantity, is applied as the purchase unit price, and
• Where shares or new share subscription warrants were not acquired in order to obtain gains through market manipulation, the closing price of the shares on the day before the market manipulation period must be regarded as the purchase unit price
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2003. 12. 12. 선고 2001도606 판결(공2004상, 192)
Unofficial English translation
Supreme Court Decision 2001Do606 decided December 12, 2003 (Gong 2004 Sang, 192)
Decisions referred to
대법원 2003. 12. 12. 선고 2001도606 판결(공2004상, 192), 대법원 2011. 10. 27. 선고 2011도8109 판결(공2011하, 2504), 대법원 2013. 7. 11. 선고 2011도15056 판결(공2013하, 1534)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Where a holding was built partly from rights acquired to profit from the manipulation and partly from earlier holdings, how are the two purchase prices combined in one weighted average?
The Seoul High Court's judgment on remand as to Defendants 1 and 2 will show how the weighted-average purchase price is computed on these facts. Any amendment to Article 443 of the Capital Markets and Financial Investment Business Act, or a later decision on unrealised profit in manipulation, would require this entry to be read again.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-25
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 7 of the 8 axes; the readings differed on axis 8 (open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “Where a holding was built partly from rights acquired to profit from the manipulation and partly from earlier holdings, how are the two purchase prices combined in one weighted average?” vs Independent “How should gains caused by independent market factors during the manipulation period be separated from gains caused by the manipulation?”
The primary reading asks how to combine two purchase prices in one weighted average for a mixed holding, while the independent reading asks how to separate gains caused by independent market factors from those caused by manipulation.
시세조종행위로 주가를 상승시킨 경우 그에 따른 실현이익은 ‘매도단가와 매수단가의 차액에 매매일치수량(매수수량과 매도수량 중 더 적은 수량)을 곱하여 계산한 금액’에서 ‘주식을 처분할 때 든 거래비용’을 공제하여 산정된다.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 Seoul High Court, in its judgment of 18 May 2018 (2017No3609), convicted Defendants 1 and 2 of the 2012 market manipulation, finding that they conspired to raise the price of Company A's shares from 2 May to 27 July 2012 by submitting matched, concerted and other manipulative orders, then exercised the subscription rights of Company B and disposed of the shares issued on exercise for a gain. In calculating the profit, it applied the subscription right exercise price of KRW 500 as the purchase price, and it also upheld the other charges, including the 2009 violations, Defendant 1's 2013 violation and fraud under the Aggravated Punishment of Specific Economic Crimes Act.
Supreme Court standard: The Supreme Court held that applying the exercise price of KRW 500 alone as the purchase price misapprehended the meaning of 'profit obtained from the violation' in Article 443(1) proviso and (2), because the purchase price must be the weighted average of the closing price on the day before the manipulation period or of the subscription right acquisition cost, according to whether the rights were held in order to profit from the manipulation. Since the 2012 part stood in concurrence with the rest of Defendant 2's convictions, and the same ground applied to Defendant 1's corresponding part, the whole judgment as to those two was reversed and remanded. It found no error in the convictions of Defendants 1 and 4 and in the calculation for the 2009 manipulation, and dismissed the appeals of Defendants 4 and 3; Defendant 3's complaints about the sentence were not a lawful ground of appeal under Article 383(iv) of the Criminal Procedure Act.
Distinguishing conditions
- Holdings whose acquisition cost sits below the closing price on the day before the manipulation period, because the excess arises from normal market movement or factors unrelated to the actor and is not profit obtained from the violation.
- A charge concerning 'loss avoided' under Article 443 rather than profit from a price rise, since the calculation set out addresses manipulation that raised the price.
- Conduct governed by the Capital Markets and Financial Investment Business Act as amended on 28 May 2013 (Act No. 11845), since the Court applied the earlier version of the Act.
Record verification notes
Build the trade record first: acquisition dates and quantities, why each lot was held, the closing price on the day before the manipulation began, here KRW 980 on 30 April 2012 against a subscription right exercise price of KRW 500, and the disposal costs. Where rights were exercised, add the purchase price of the rights to the exercise price before averaging, and average the sale proceeds over the quantity sold during the period.
From the official text
Points at issue
구 자본시장과 금융투자업에 관한 법률 제443조 제1항 단서 및 제2항의 적용을 위하여 ‘위반행위로 얻은 이익의 가액’을 산정할 때 유의하여야 할 사항 및 ‘위반행위로 얻은 이익’에 실현이익과 미실현이익이 모두 포함되는지 여부(적극) / 시세조종행위로 주가를 상승시킨 경우, 그에 따른 실현이익을 산정하는 방법
Unofficial English translation
Matters to which attention must be given when calculating the 'amount of the gain obtained from the violation' for purposes of the proviso to Article 443 (1) and paragraph (2) of the former Financial Investment Services and Capital Markets Act, and whether 'gains obtained from the violation' include both realized gains and unrealized gains (affirmative) / Method of calculating the realized gains arising where the share price was raised by market manipulation
Summary of the holding
구 자본시장과 금융투자업에 관한 법률(2013. 5. 28. 법률 제11845호로 개정되기 전의 것, 이하 ‘자본시장법’이라 한다)은 시세조종행위를 금지하고(제176조), 이를 위반한 경우 형사처벌하고 있다(제443조). 자본시장법은 ‘위반행위로 얻은 이익 또는 회피한 손실’을 범죄구성요건의 일부로 삼아 그 가액에 따라 형을 가중하고 있으므로(제443조 제1항 단서 및 제2항), 이를 적용할 때에는 위반행위로 얻은 이익의 가액을 엄격하고 신중하게 산정함으로써 범죄와 형벌 사이에 적정한 균형이 이루어져야 한다는 죄형 균형의 원칙이나 형벌은 책임에 기초하고 그 책임에 비례하여야 한다는 책임주의 원칙을 훼손하지 않도록 유의하여야 한다. ‘위반행위로 얻은 이익’은 위반행위로 행위자가 얻은 인과관계에 있는 이익의 전부를 뜻하므로, 시세조종행위 기간 중에 한 구체적 거래로 인하여 이미 발생한 이익(이하 ‘실현이익’이라 한다)과 시세조종행위 종료 시점 당시 보유 중인 시세조종 대상 주식 또는 신주인수권증권의 평가이익(‘미실현이익’)이 모두 포함된다. 시세조종행위로 주가를 상승시킨 경우 그에 따른 실현이익은 ‘매도단가와 매수단가의 차액에 매매일치수량(매수수량과 매도수량 중 더 적은 수량)을 곱하여 계산한 금액’에서 ‘주식을 처분할 때 든 거래비용’을 공제하여 산정된다. 시세조종행위로 이익을 얻기 위해 주식을 취득하였다면 실제 매수가액을 매수수량으로 가중평균한 단가를 매수단가로 적용하고, 신주인수권증권을 취득한 뒤 이를 행사하여 주식을 발행받아 처분하였다면 신주인수권 행사가격에 신주인수권증권 매입가액을 더한 금액(이하 ‘신주인수권 매수가격’이라 한다)을 매수수량으로 가중평균한 단가를 매수단가로 보아야 한다. 그러나 시세조종행위로 이익을 얻기 위해 주식이나 신주인수권증권을 취득한 것이 아니라면, 시세조종기간 전일 주식의 종가를 매수단가로 보아야 한다. 기존에 보유하고 있던 주식 또는 신주인수권 매수가격은 시세조종행위와 무관하기 때문이다. 결국 시세조종기간 전일의 종가가 정상적인 주가변동이나 위반행위자와 무관한 변동요인으로 말미암아 기존에 보유하고 있던 주식 또는 신주인수권 매수가격보다 높다면, 그 차액만큼의 이익은 시세조종행위와 관계없이 얻은 것이어서 ‘위반행위로 얻은 이익’으로 볼 수 없다. 반면 시세조종기간 전일 종가가 주식 또는 신주인수권 매수가격보다 낮았는데 시세조종행위로 주가가 주식 또는 신주인수권 매수가격보다 상승하였다면, 주식 또는 신주인수권 매수가격과 시세조종기간 전일의 종가의 차액만큼의 이익도 시세조종행위로 형성된 것이므로 ‘위반행위로 얻은 이익’에 해당한다. 한편 시세조종기간에 주식이 매도된 경우 매도단가는 실제 매도가액을 매도수량으로 가중평균하는 방식으로 정하여야 한다.
Order
원심판결 중 피고인 1, 피고인 2에 대한 부분을 파기하고, 이 부분 사건을 서울고등법원에 환송한다. 피고인 4, 피고인 3의 상고를 기각한다.
Unofficial English translation
The portion of the judgment of the court below concerning Defendant 1 and Defendant 2 is reversed and remanded to the Seoul High Court. The final appeals of Defendant 4 and Defendant 3 are dismissed.
Provisions referred to
구 자본시장과 금융투자업에 관한 법률(2013. 5. 28. 법률 제11845호로 개정되기 전의 것) 제176조, 제443조 제1항, 제2항
Read 2026-10-25 · Cross-read 2026-10-25. 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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