HYBE employees sentenced to prison for insider trading on BTS's military service

Three HYBE employees received suspended sentences and fines for insider trading related to BTS's military enlistment, avoiding significant financial losses before the announcement.

Boy band BTS [WEVERSE]

Three people affiliated with HYBE were handed fines and suspended prison sentences for trading on insider knowledge of boy band BTS's military enlistment.

The Seoul Southern District Court on Tuesday gave a 37-year-old employee of HYBE subsidiary Source Music surnamed Kim a 10-month sentence, suspended for two years, along with a 231 million won ($166,420) fine, for violating the Financial Investment Services and Capital Markets Act.

A 33-year-old former employee of subsidiary BigHit Music surnamed Lee and a 41-year-old former employee of subsidiary Belift Lab received six-month sentences, suspended for two years, and fines of 51 million won and 65 million won, respectively.

The court also ordered the confiscation of an amount equal to the losses the three had avoided by selling shares using nonpublic information.

The defendants were accused of selling all their HYBE shares before the company publicly announced, via a YouTube video on June 14, 2022, that BTS would pause its group activities due to the enlistment of member Jin. By doing so, they avoided more than 230 million won in losses.

The day after BTS’s announcement, HYBE’s stock price plunged 24.78 percent.

“In an entertainment company, an artist’s activities have a significant impact on revenue, so whether they continue or suspend activities is a highly sensitive matter,” the court said. “This offense constitutes a serious crime that undermines the fairness of the capital market and warrants strong social condemnation.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY JUNG SI-NAE [lim.jeongwon@joongang.co.kr]