Strengthening Punishments for Capital Market Crimes
A new plan is being developed to enhance the severity of penalties for unfair trading activities in the capital market, including market manipulation and insider trading. This initiative aims to impose sentences of up to life imprisonment for cases involving large sums of money.
The Supreme Court Sentencing Commission announced on the 10th that it reviewed updated sentencing guidelines for securities and financial crimes during a full meeting held on the 7th. These guidelines serve as references for judges when determining appropriate penalties. They establish “sentencing factors” such as the circumstances and consequences of the crime, the offender’s history, and whether damages were compensated. Based on these factors, they recommend sentencing ranges categorized as “mitigation,” “standard,” or “aggravation.”
Securities Crimes: Up to Life Imprisonment… Sentencing Reduction for Cooperation with Investigations
The commission has decided to increase the recommended sentencing ranges for crimes that violate the fairness of the capital market, including insider trading, market manipulation, and fraudulent transactions. For cases where the criminal amount exceeds 30 billion Korean won, the “aggravation” category will allow sentences of up to 19 years. If there are two or more special aggravating factors—such as significantly impacting actual stock prices or using particularly malicious methods—the commission will recommend sentences of up to life imprisonment.
Currently, sentences can be reduced if “most of the criminal proceeds were not consumed.” However, the revised guidelines will strictly limit reductions to cases where proceeds are confiscated or fines are paid.
Nevertheless, the commission will recognize cooperation in revealing others’ crimes during investigations or trials as a mitigating factor, similar to voluntary surrender, under the capital market law’s “Leniency” system.
Expanded Grounds for Suspended Sentences in Financial Crimes… Strengthened Penalties for Online Gambling
For financial crimes, the commission has maintained existing recommended sentences but expanded grounds for mitigation and suspended sentences. In cases of bribery by financial institution employees related to their duties, sentence reductions were previously allowed only if bribes or benefits were returned before investigations began. Under the revised guidelines, reductions will apply if benefits are fully returned, even after investigations.
Additionally, recommended sentencing ranges will be lowered for individuals working in financial institutions but not involved in financial tasks, such as bank IT staff or supermarket team leaders.
Meanwhile, penalties for speculative and gaming crimes, including unlicensed and quasi-casino operations and online sports betting, will generally increase. For quasi-casino operations like holdem pubs, the recommended range will rise from 8 months to 1 year and 6 months to 10 months to 2 years. The lower limit for online horse racing and sports betting will increase from 8 months to 10 months. The commission stated, “Strong penalties are necessary due to the severe social harm caused by easily accessible and highly addictive online gambling sites.”
Finalizing the Guidelines
The commission plans to finalize the guidelines in March next year after additional reviews of money laundering sentencing standards, public hearings, and gathering opinions from related institutions.