Legal Analysis of the Corporate Penalties in Korean Financial Laws

Abstract

Corporate penalty has become an important and much-talked about topic. This Article argues that the provisions on corporate penalty create social costs in excess of its benefits and produce serious problems of over-deterrence. Moreover, some of them could be blamed on their illegitimacy. The Article, in turn, offers an overview of and commentary on the Korea approach to corporate punishment and an analysis of illegitimacy on the focus on financial law provisions. Part I and Part II begin with a discussion of corporate penalty and, in rough form, rules for analysis of illegitimacy on the financial law provisions. Part III examines several proposals in 6 key cases to change corporate penalties in financial laws, and explains why most of these proposals would barely alter the current structure: (i) the double regulation and punishment both by financial law and competitive law, and by financial law and advertisement law, (ii) the violation of the principle of proportionality under the Constitution, (iii) the criminal punishment and the administrative order punishment, (iv) the deficiency of criminal requirement and the principle of legality, (v) the appointment of chief privacy officers in financial institutions, and (vi) the penalty on joint penal provisions. Part IV addresses a conclusion of the Article. A close look at the such cases reveals a violation of the Constitution most of the time. For this reason, the special task force team by the Government recently organized is expected to take care of all possible problems in corporate penalty and punishment.