Employees from BTS’s label, HYBE, accused of insider trading for selling stock before BTS’s military enlistment and hiatus, denied the charges in their first trial.
On October 22, the 13th Criminal Division of the Seoul Southern District Court held the first hearing for three individuals, including former HYBE employees ‘A’ and ‘B,’ and current subsidiary employee ‘C,’ who are charged with violating the Capital Markets Act.
During the trial, the defense attorneys for all the accused denied the charges. They argued, “While the defendants were aware of BTS member Jin‘s military enlistment, they were not aware of the complete group hiatus or the timing of the announcement. Furthermore, they did not know that the enlistment itself constituted undisclosed material information.”
In June 2022, BTS announced via their YouTube channel ‘Bangtan TV‘ that they would be pausing group activities to focus on solo projects. The announcement led to a 24.87% drop in HYBE’s stock price the following day.
According to the prosecution, between late May and early June 2022, the defendants learned of the upcoming hiatus announcement and sold their HYBE stocks just before the video was released, avoiding losses totaling approximately 233 million KRW (about 168,836 USD).
Investigations revealed that the defendants obtained this information through their positions in the Visual Creative department (which oversees aspects like music videos, album covers, and styling) or protocol duties. They reportedly inquired about BTS’s enlistment and hiatus from relevant staff during the video filming process.
The Financial Supervisory Service’s Special Judicial Police for Capital Markets referred the case to the prosecution last May. In June, the Seoul Southern District Prosecutor’s Office’s Financial Investigation Division indicted the three employees without detention.
The next trial is scheduled for November 26.
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