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The Scheme to Secure Efficiency of the Investigation into Security Crimes

  • DONG-A LAW REVIEW
  • 2012, (54), pp.485-516
  • Publisher : The Institute for Legal Studies Dong-A University
  • Research Area : Social Science > Law

Sun, Jong-Soo 1

1동아대학교 법학연구소

Accredited

ABSTRACT

As the service transacted in the stock market has become complicated and diverse, the violation of regulations is on the rise every day, and has become bigger, organized, more various and intelligent. These prohibited activities in the stock market are referred to as ‘security crimes’. With regard to the concept of security crimes, it can be defined in a narrow sense as the activity which violates the capital market act and therefore becomes the target for a criminal sanction. On the other hand, security crimes in a broad sense include all kinds of criminal activities related to stock transactions as well as the stock crime in a narrow sense. Among the activities occurring in the stock market, security crimes must be restricted criminally by legislators, and its concept corresponds to the purpose of Article 1 of the capital market act, the purpose of restrictions on stocks. Therefore, the concept of security crimes should be understood in a broad sense including all kinds of crimes occurring related to the issue and circulation of marketable securities but needs to be limited to the crimes concerned with the restriction on stocks in the capital market act. Due to the characteristics of security crimes, the current process to deal with it is that the self regulatory organizations of Korea Financial Investment Association and Stock Exchange recognize an offense first and notify it to Financial Services Commission, a national regulatory organization. The national regulatory organization prosecutes only after going through a rather complex and duplicated process of deliberating autonomously through its capital market inquiry committee and securities & futures commission and then going to the prosecution. Because of this, it takes a lot of time from the occurrence of security crimes to the indictment by the prosecution, so the current system to investigate and inquire into security crimes is not efficient. The suggestions to solve this problem is, first, the introduction of a special judicial police system, second, the abolition of plural commissions, such as capital market inquiry committee and securities & futures commission, and third, establishment of a consultative body between the prosecution and financial supervisory organizations. The three suggestions are worth being considered for more effective investigation process into security crimes. However, prior to these institutional remedies, the reflective study of the functions and the main duties of financial supervisory organizations must precede. When a special judicial police system is introduced and the plural commissions are discontinued, the main works of the financial supervisory organizations can be reduced to investigation and punishment. It may improve the efficiency of investigation and punishment, but they will not be able to use its ability to administer and supervise the stock market demanding administrative regulations. Therefore, the suggestion to form a consultative body between the prosecution and financial supervisory organizations is reasonable for efficient and effective investigation and punishment.

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