A former CEO of Ecopro HN has received a confirmed prison sentence for illegally profiting from stock purchases made before the announcement of a stock dividend.
According to legal sources on September 28, the Supreme Court's third division, led by Justice Oh Seok-jun, upheld the lower court's sentence of one year and six months in prison, a fine of 1.5 billion won, and a confiscation order of 618 million won against individual A, who was charged with violating the capital market law.
A was accused of purchasing shares between June 29 and July 15, 2021, after learning about the planned stock dividend of Ecopro HN, resulting in an illicit gain of approximately 130 million won. He also faced allegations of using insider information to gain about 540 million won from stock trades before the announcement of third-quarter sales by another Ecopro subsidiary, Ecopro BM.
Both the first and second trials found A guilty of these charges.
During the trial, A argued that the announcement made by Ecopro HN on July 7, 2021, stating that it was "considering a stock dividend," meant that the information was no longer undisclosed.
However, the first trial stated, "The announcement that the company is considering a stock dividend does not indicate that information related to the dividend has been disclosed to the public at large."
The court explained that the announcement merely indicated that Ecopro HN was considering a stock dividend, leaving room for change, and did not provide specific timing or the ratio of the dividend.
The second trial also noted that the announcement lacked critical details such as the specific timing, scale, and allocation ratio of the stock dividend, which are essential for investors' decision-making. Therefore, it concluded that the information could not be considered publicly disclosed in a way that would significantly impact investment decisions.
A was also accused of profiting approximately 40 million won from stock trades using undisclosed information about Ecopro's third-quarter operating profit and revenue before it was publicly announced. However, both trials ruled that it was not proven that A acquired this information before its disclosure, resulting in a not guilty verdict.
* This article has been translated by AI.
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