'HYBE Employee Gains 230 Million KRW by Selling Stocks Using Non-Public Information on BTS Hiatus'... Prosecutors Send Case

The Capital Market Special Judicial Police of the Financial Supervisory Service announced on the 31st that after investigating allegations of insider trading involving employees of an entertainment agency related to the group activities of a global idol group, they recently sent three individuals, including a team leader from the agency, to the Seoul Southern District Prosecutors' Office.

Lee Bok-hyun, Governor of the Financial Supervisory Service, is speaking at the joint discussion meeting of related organizations to eradicate unfair trading held at the Korea Exchange in Yeouido, Seoul on the 23rd. Photo by Kim Hyun-min kimhyun81@

The Special Judicial Police of the Financial Supervisory Service conducted the investigation under the direction of the Southern District Prosecutors' Office. The individuals sent were employees responsible for tasks related to the idol group, who obtained adverse information about the temporary suspension of group activities through their duties and sold their shares before the information was publicly disclosed, avoiding losses totaling 230 million KRW (up to 150 million KRW per person).

Previously, on June 14 last year, BTS announced the suspension of group activities through their official YouTube channel. The next day, HYBE's stock price plummeted by 24.87% compared to the previous trading day. As HYBE's stock price had been declining even before the video was released, suspicions were raised that insider trading might have occurred using non-public information.

The Financial Supervisory Service stated, "In the case of listed entertainment agencies, the activity plans of key artists are major management matters that can significantly impact the company's stock price. Companies need to establish systems that ensure related information is transparently disclosed to general investors in a timely and proper manner, and strengthen internal controls to prevent executives and employees from using non-public information, thereby providing investor protection measures befitting the industry's status."

They added, "Executives and employees of publicly listed companies must be fully aware that using non-public information obtained through their duties for stock trading or allowing others to use such information is subject to criminal penalties. We plan to thoroughly investigate and strictly respond to any acts that undermine the fair trading order of the capital market in the future."