A Case Study on the Use of Manipulativeand Deceptive Devices- Korea Supreme Court 2003. 11. 14. 2003도686-

Abstract

In munipulation, it could be a difficult problem how to prove manaipulative act. Especially, in case of the use of manipulative and deceptive devices is it more difficult to find out who manipulative act intented, what he did ect. Nevertherless, Korea Securities Exchange Act and US Securities Exchange Act try to regulate the use of manipulative and deceptive devices in market. It shall be unlaw for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities to use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors. In this case, lead the Korea Supreme Court to make its judiciary judgment on the use of manipulative and deceptive devices in the korea market. The court decided that it is illegal, only if it was reported to Korea Financial Supervisory Commission to make any objective statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security. In my opinion, it's very rational decision of the supreme court, because it tried objectively to apply the concept "the use of manipulative and deceptive devices" in securities exchange market.