The purpose of this study is to observe the capital market reaction concerning designation as an unfaithful disclosure company and imposition of penalty points. For this purpose, two methodologies are used in the study. The first methodology is the event study method which analyzes the stock market return before and after unfaithful disclosure designation due to reasons such as disclosure failure, disclosure overturn and disclosure change. The second methodology is the regression analysis method where the dependent variable is set as the daily stock return of the unfaithful disclosure company and the explanatory variable is set as the unfaithful disclosure penalty point. Information disclosure to the capital market performs the function of enabling efficient allocation of resources by alleviating the information asymmetry problem that exists between the internal and external users of companies. If the reliability and accuracy of the information disclosure which performs these functions are not secured, the market participants will have doubts on the reliability of the information provided by the companies, and there will be difficulty in assessing the objective value of the companies. Being designated as an unfaithful disclosure company means there is an error in the speed, accuracy and reliability of the information disclosure of the company, and it can be said that the gravity of the violation is heavier when the penalty is higher. If market participants interpret unfaithful disclosure designation and imposition of a penalty as increased uncertainty of information disclosure and a decline in reliability, the resulting negative perception will be reflected in the stock prices. Therefore, if the designation of unfaithful disclosure has an additional information effect in the capital market, the corresponding company is expected to have a negative stock price reaction on the day of unfaithful disclosure designation. This expectation has been validated by Sohn(2001) and Choi et al.(2013). However, since there is a chance that the results of previous studies such as these are due to many other factors of unfaithful disclosure of a corporation, it cannot be concluded with certainty that the cause of the negative stock price reaction is only due to unfaithful disclosure. Therefore, in addition to the case studies of previous studies, this study conducts regression analysis on the profit rate of the date of unfaithful disclosure company designation and penalty points for unfaithful disclosure, to verify aspects previous studies failed to verify due to inadequate material on penalty points. The analysis result shows a drop in the stock market return from the day of the designation of unfaithful disclosure, and a statistically significant negative cumulative return. This result signifies that stock market participants perceive designation of unfaithful disclosure as a negative event that impacts stock prices. Meanwhile, though the negative response was expected to increase proportionally with the imposed penalty points during the quarter of penalty imposition, the penalty points and negative reaction of the capital market were found to be unrelated. On the other hand, the negative response of the capital market was found to increase according to the level of penalty accumulation through past designation of unfaithful disclosure. This study is differentiated from previous studies as it directly observes the effect of penalties through a short-term stock price reaction based on the date of unfaithful disclosure designation. In addition, the study presents an intuitive result that the expense of a firm may increase due to the designation of unfaithful disclosure. Furthermore, the result of this study that unfaithful disclosure penalties accumulated from the past is related to the capital market reaction on the day of unfaithful disclosure designation is expected to provide significant implications to information users such as executives, investors and policy makers.