The Supreme Court rendered the 104-Tai-Shang-36 Criminal Judgment of January 8, 2015 (hereinafter, the "Judgment"), affirming that actors who continuously purchase a stock by large volume for a price higher than the previous tick price at the time of order or for a price which is the price appreciation ceiling on the trading day via their accounts over a short period of time, whose purchase of a particular stock accounts for over 60% of the total trading volume of the stock in the market, and whose sale of the stock also accounts of 60% to the extent that the trading price and volume of such specific stock are obviously abnormal can be deemed to have an illegal intent and conduct illegal acts to inflate the price of such stock.

According to the facts underlying the Judgment, the Defendant was found, in the district court decision, to be in violation of Article 155, Paragraph 1, Subparagraph 4 of the Securities and Exchange Law, which provides: "The following acts shall not be engaged with respect to the securities listed on a stock exchange: …(4) To continuously buy at high prices or sell at low prices designated securities for his own account or under the names of other parties with the intent to inflate or deflate the trading prices on said securities traded on the centralized securities exchange market." The Defendant filed this appeal.

According to the Judgment, the expression "continuously buy at high prices" in Article 155, Paragraph 1, Subparagraph 4 of the Securities and Exchange Law means to purchase within a specific time period on a daily basis for prices higher than average purchase prices and close to the highest prices or for highest daily prices and this is not necessitated by drastic changes in the prices of a stock in the trading market objectively as a result of such purchases. If the stock is purchased continuously for a price which is the daily price appreciation limit or for a price close to that, resulting in rising prices and volume of such stock, which causes others to trade such stock out of the misbelief that the stock is actively traded and inflates the market price of the stock, the market price at this juncture is formed not based on the principle of supplies and demands but rather as a result of artificial distortion of prices. This undermines normal market operation. Therefore, this is certainly different from circumstances of stock purchase to secure the company management and is an act of market manipulation prohibited under the above-mentioned provision.

Therefore, the Judgment affirmed the finding in the district court decision that the Defendant who continuously purchased a stock by large volume for a price higher than the previous tick price at the time of order or for a price which is the price appreciation limit on the trading day via his accounts over a short period of time, whose purchase of a particular stock accounts for over 60% of the total trading volume of the stock in the market, and whose sale of the stock also accounts of 60% to the extent that the trading price and volume of such specific stock are obviously abnormal indeed had an unlawful intent and conducted illegal acts to inflate the prices of such stock. Since the district court decision does not violate the law, the Defendant's appeal was rejected.