HYBE label employees sentenced for insider trading ahead of BTS hiatus announcement
Several employees from HYBE-affiliated labels are facing serious consequences after insider trading.
On July 22 KST, the Seoul Southern District Court sentenced Mr. Kim, a 37-year-old employee from Source Music, to 10 months in prison, suspended for two years. He was also fined 231 million KRW (approx. $167,000 USD).
Former BigHit Music employee Mr. Lee, aged 33, received a 6-month suspended sentence and a fine of 51 million KRW. Another former employee, Mr. Kim from Belift Lab, 41, got the same 6-month suspended sentence and was fined 65 million KRW.
The court found that these employees sold HYBE shares using insider information about BTS’s group activity suspension. They acted before the June 14, 2022 announcement regarding BTS’s temporary hiatus, starting with Jin’s military enlistment.
After the announcement, HYBE’s stock price dropped a shocking 24.78%.
The court made it clear:
"In the entertainment industry, an artist’s group activity directly impacts company revenue. The suspension of activities is highly sensitive and material information."
They added that the crime undermines market fairness and deserves public condemnation.
This scandal is a significant hit for HYBE as they navigate the fallout from BTS’s hiatus.
For related updates, check out this tweet:
HYBE employees sentenced for insider trading related to BTS’s hiatus announcement. #BTS #HYBE
— AllKPop (@allkpop) July 22, 2023
Watch the announcement video here:
