The Financial Supervisory Service announced on May 31 KST that as a result of the investigation under the direction of the Seoul Southern District Prosecutor’s Office, three people, including a team leader of HYBE, were sent to the prosecution on charges of violating the Capital Markets Act.
According to the special envoy, these are employees in charge of idol group-related work at the HYBE label, and after learning the information that BTS would temporarily suspend group activities, they sold their stocks before this information was announced.
BTS announced a temporary suspension of group activities after 9 years on June 14 of last year. HYBE shares fell 24.87% the next day on June 15. It was confirmed that three employees of the agency avoided a total loss of 230 million won based on the closing price on June 15.
In this case, the Financial Supervisory Service pointed out that HYBE increased investor confusion by disclosing information about the temporary suspension of BTS group activities through social media videos, rather than public announcements or official announcements.
The Financial Supervisory Service said, “Entertainment agencies have a significant impact on the company’s stock price depending on major management issues of the activity plans of key artists. We need to prepare measures to protect investors that match the status of the industry, such as strengthening internal control to prevent them from being used.”
It added in conclusion, “Insiders, such as executives and employees of listed companies, should keep in mind that they may be subject to criminal punishment if they use undisclosed information learned in relation to their job for stock trading or let others use it.“
