"BTS Activity Suspension" Known in Advance, Stocks Sold... HYBE Employees Say "Did Not Know It Was Insider Information"

Allegations of Violation of the Capital Markets Act

Former and current employees of an affiliate accused of selling HYBE stocks after learning in advance about BTS's suspension of group activities denied the charges at their first trial.

On the 22nd, the Criminal Division 13 of the Seoul Southern District Court (Presiding Judge Kim Sang-yeon) held the first hearing for three individuals: former HYBE and affiliate employees A and B, and a current affiliate employee C, who are charged with violating the Capital Markets Act.

The defense attorneys stated, "They knew about BTS member Jin's (real name Kim Seok-jin) enlistment, but were unaware of the suspension of full-group activities and the timing of the announcement, and did not know that the enlistment itself was material non-public information."

They were responsible for BTS's visual creative and protocol for 8 to 10 years and had prior knowledge that a video announcing BTS's temporary suspension of group activities due to members' enlistment would be released on June 14, 2022, on the YouTube channel 'BangtanTV.' The day after the video was released, HYBE's stock price dropped by 24.78%. However, they sold 3,800 shares of HYBE stock they held on June 13-14, 2022, just before the video was made public. The total loss they avoided through stock trading using material non-public information amounts to 233.11 million KRW.

During the time the video was being filmed, they repeatedly inquired with the person in charge about BTS's suspension of activities, and just before the video was released, they were investigated to have told an acquaintance, "An article about (BTS) going to the military will come out next week, so I need to sell all my stocks."