[2023 Major Trials]② From Stock Manipulation to Cryptocurrency... Consecutive Sentences for Economic Offenders Undermining the Market

Intense Legal Disputes and Complex Law Application Still Result in Heavy Sentences
Technological Innovation Recognized as a 'New Industry Growth Engine'

Unfair practices in the capital market are crimes that undermine market trust. As young people's interest in stocks and virtual assets grows, various unfair practices are also rampant. In particular, with controversies arising over whether coins can be considered virtual assets, attention is focused on the court's judgment.

Trials involving startups and IT companies expanding their influence in the market based on new technologies have either been judged by the courts or are awaiting judgment. The concerns of judges handling increasingly complex economic-related trials are also growing.

Stock Price Manipulation and Insolvent Funds... Major Cases That Hurt Ordinary People

The Seoul Southern District Court, which has jurisdiction over the Yeouido securities district, features specialized and systematic financial and securities crimes. Most cases involve intense legal disputes and difficult application of laws, resulting in many trials that have been ongoing for quite some time. The Soci?t? G?n?rale (SG) securities-related stock price crash incident is a representative case. Currently, the first trial is underway for CEO Ra Deok-yeon Hoan (42) and two others.

The second trial is also ongoing for Jang Ha-won, CEO of Discovery Asset Management, who received approximately 109 billion KRW in investment funds from fund investors by falsely representing important matters. At that time, the court judged that it was difficult to see that CEO Jang was aware in advance that the underlying assets of the sold fund were insolvent. The prosecution appealed, and the second trial is currently in progress, with a detention warrant for CEO Jang having been dismissed.

On November 2, 2020, victims of the Lime Fund held a rally in front of the Financial Supervisory Service in Yeouido, Seoul, urging for dispute resolution to protect victims of the Lime Fund. Photo by Jinhyung Kang aymsdream@

Kim Bong-hyun, former chairman of Star Mobility and a key figure in the 'Lime Fund Scandal' that caused a suspension of redemption of about 1.6 trillion KRW, had the first trial's sentence of 30 years imprisonment upheld at the second trial held in September. Kim is currently awaiting the Supreme Court's judgment following his appeal. Lee Jong-pil, former vice president of Lime Asset Management, was sentenced to 20 years imprisonment and fined 4.8 billion KRW at the second trial, appealed, but the Supreme Court dismissed the appeal, finalizing the sentence.

At the Seoul Eastern District Court, trials are ongoing for the Saemaeul Geumgo embezzlement case, the investment solicitation case, and cases related to former Saemaeul Geumgo Central Association chairman Park Cha-hoon. In September, employees who embezzled 4 billion KRW in project financing (PF) loan fees were all sentenced to imprisonment.

Choi, vice president of M Capital, and Choi, deputy director of Saemaeul Geumgo Central Association, who were indicted on charges of bribery and violation of the Act on the Regulation of Concealment of Criminal Proceeds under the Specific Economic Crimes Act, were sentenced to 4 years and 5 years imprisonment respectively. Former chairman Park is also on trial for receiving about 260 million KRW in money and valuables from executives of Saemaeul Geumgo Central Association and asset management company representatives, and has been sentenced to 10 years imprisonment.

The Fall of Young Entrepreneurs Who Shook the Domestic Economy

On May 23, 2022, Yoon Chang-hyun, Chairman of the People Power Party's Special Committee on Virtual Assets, presided over an emergency seminar titled "Luna·Terra Incident, Causes and Countermeasures" held at the National Assembly Members' Office Building. Photo by Yoon Dong-joo doso7@

The trial of Shin Hyun-sung, former CEO of Chai Corporation and a key figure in the virtual asset 'Terra-Luna crash incident,' is also underway. He faces numerous charges including fraud, breach of trust, embezzlement, mediation of breach of trust, breach of duty, violations of the Capital Markets Act, Electronic Financial Transactions Act, and the Act on Reporting and Using Specified Financial Transaction Information, with eight people involved including Shin. Given the fierce courtroom battle over whether Luna coin constitutes a security during the first trial on October 30, the trial is likely to continue for some time.

The first trial for Bae Jae-hyun, chief investment officer who was detained on charges of manipulating stock prices during Kakao's acquisition of SM Entertainment, was held on the 12th. Since six people including founder Kim Beom-su, CEO Hong Eun-taek, and Kakao Entertainment CEOs Lee Jin-su and Kim Sung-soo are under prosecution, the scale of the trial may expand.

Rulings That Sounded the Alarm in the Startup World... Consumers Win iPhone Damage Lawsuit

On March 5, 2020, a 'Tada' vehicle is parked at a garage in Yeongdeungpo-gu, Seoul.
[Photo by Asia Economy DB]

The Supreme Court delivered a final verdict of not guilty for the management and corporation operating the vehicle call service 'Tada,' sending a warning to the political circles and investigative agencies that tried to tighten control over the startup sector.

On June 1, the Supreme Court upheld the original verdict of not guilty for former SoCar founder Lee Jae-woong and former VCNC CEO Park Jae-wook, who were indicted for violating the Passenger Transport Service Act. The corporations SoCar and VCNC, which were also tried together, were acquitted as well.

The Seoul High Court ruled in favor of consumers in a joint lawsuit against Apple Korea, claiming that Apple deliberately degraded the performance of old iPhone models through software updates. On the 6th of this month, the Civil Division 12-3 of the Seoul High Court (Presiding Judges Park Hyung-joon, Yoon Jong-gu, Kwon Soon-hyung) ordered Apple to pay 70,000 KRW to each of the seven consumers who filed the damages claim.

This content was produced with the assistance of AI translation services.