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Photo: HYBE |
[Alpha Biz= Kim Jisun] Three former employees of HYBE subsidiaries have been sentenced to suspended prison terms and heavy fines for insider trading after selling HYBE shares ahead of the public announcement that BTS would suspend group activities due to mandatory military enlistment.
On July 22, the Seoul Southern District Court's Criminal Division 13, presided by Judge Kim Sang-yeon, sentenced Mr. Kim (37), a former employee of Source Music, to 10 months in prison with a two-year suspension, along with a fine of KRW 231 million (approx. USD 170,000).
Mr. Lee (33), a former BigHit Music employee, received six months in prison with a two-year suspension and a fine of KRW 51 million, while Mr. Kim (41), formerly of Belift Lab, was sentenced to six months suspended for two years and fined KRW 65 million.
The court also ordered the defendants to forfeit the financial gains avoided through their illegal stock trades, equating to the amount of loss they evaded.
The three individuals were found to have known in advance that BTS would announce the temporary suspension of group activities due to member Jin’s military enlistment via a YouTube video on June 14, 2022. Based on this non-public material information, they sold all of their HYBE shares before the announcement and avoided approximately KRW 230 million in losses.
On the day following the announcement, HYBE’s stock price plummeted 24.78%.
The court stated, “In the entertainment industry, artist activity significantly impacts corporate earnings, and the suspension of group activities is particularly sensitive.” It further noted, “This crime gravely undermines the fairness and integrity of the capital market and warrants strong societal condemnation.”
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
