The court also ordered the German bank's local securities unit to pay about 2.8 billion won ($2.34 million) in fines and restitution, a court official told Reuters, adding that Deutsche's South Korean banking unit was also ordered to pay around 43.7 billion won.

The case involved the two Deutsche units selling about 2.4 trillion won worth of stocks on the Seoul bourse on Nov. 11, 2010, triggering a plunge in share prices in the benchmark KOSPI <.KS11> in the closing minutes of trade that day, the Seoul Central District Court official said.

The Deutsche Securities employee, identified by the court as Park Do-joon, was at the time a senior vice president in charge of stock derivatives, according to Yonhap news agency.

Defendants made unlawful gains through derivatives they had previously bought by selling off a large quantity of stocks, pushing down the benchmark index on an option expiry day, the court said. Domestic investors lost about 140 billion won due to the drop, regulators have said.

Asked about the ruling, Hong Kong-based spokesman Michael West said Deutsche Bank "respectfully acknowledges the court's decision".

"Deutsche Bank has strengthened its systems and controls and is committed to compliance with applicable laws and regulation in all jurisdictions," he added, declining further comment.

In the same case, South Korean prosecutors in 2011 had also charged three former Deutsche employees who are not South Korean nationals, but have not been able to ascertain their whereabouts, the country's Financial Supervisory Service said on Monday.

Of 15 cases brought by South Korean entities claiming damages against Deutsche for the share price drop, four are still pending, Yonhap reported.

($1 = 1,192.5800 won)

(Editing by Miral Fahmy, Tony Munroe and Ryan Woo)

By Joyce Lee