HYBE employees sentenced to prison for insider trading ahead of BTS enlistment; fined up to 231 MILLION
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The Seoul Southern District Court found three individuals guilty of violating South Korea's Capital Markets Act after they used confidential information to sell company shares ahead of BTS's hiatus announcement in 2022, states a report on Koreaboo.
Prison Sentence and Fines
Kim (37), formerly with Source Music, received a 10-month prison sentence, suspended for two years and was fined KWR 231 million (approximately $167,000). Two others employees, Lee of BIGHIT MUSIC and another Kim from BeLift Lab were sentenced to six months in prison, also suspended for two years.
Lee was fined KWR 51 million ($47,000).
Court's Statement
According to court findings, the three were ordered to forfeit the financial gains made from the illicit trades as they acted on non-public knowledge of the group's hiatus. The three reportedly had knowledge of a pre-recorded video announcing BTS's temporary hiatus due to member Jin's impending military service. The video was released on June 14, 2022. The employees sold their HYBE shares, collectively avoiding losses of over KRW 230 million, with HYBE's stock value plummeting by 24.78% the day after the announcement.
According to reports, the court stated, "The decision to pause group activities is extremely sensitive information." It added, "This crime undermines the fairness of the capital market and warrants strong public condemnation.'
Sale of BTS' Flight Details
In a separate but related development, an airline crew member was indicted for allegedly selling BTS members' flight information to brokers.
According to a statement by HYBE on Tuesday, the Seoul Metropolitan Police Agency's cybercrime unit apprehended three suspects, including an airline employee over accusations of breaching the Personal Information Protection Act by leaking sensitive travel details of BTS and other celebrities in exchange for millions.
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Authorities traced the suspects' financial transactions and confirmed their operations which involved brokers selling data to fans through social media platforms and chat rooms.
HYBE, which launched a special task force in September 2023 to combat such breaches, said in a statement, "We will respond firmly and hold those responsible fully accountable, with zero tolerance and without offering any settlements or leniency, for the criminal act of commercializing and trading artists' personal information."
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