Multiple HYBE Employees Sentenced To Prison For Illegal Activities Ahead Of BTS’s Enlistment

Several employees of HYBE’s subsidiary labels have been handed suspended prison sentences for using insider information to sell off company shares ahead of BTS’s military enlistment announcement.

On July 22, the Seoul Southern District Court ruled that three individuals had violated South Korea’s Capital Markets Act by engaging in unfair trading based on undisclosed information.

The court sentenced Kim (37), a former employee of Source Music, to 10 months in prison (suspended for two years) along with a fine of ₩231 million KRW (about $167,000 USD).

Two other individuals — Lee (33), formerly of BIGHIT MUSIC, and another Kim (41), previously with BeLift Lab — were also convicted. Both received suspended sentences of six months in prison for two years. Lee was fined ₩51.0 million KRW (about $36,900 USD), while the latter Kim was fined ₩65.0 million KRW (about $47,000 USD).

All three were also ordered to forfeit the amount of financial losses they had avoided through the illegal trades.

The court found that these employees had prior knowledge of a video that would announce BTS’s temporary group hiatus due to member Jin’s enlistment. The video was published on June 14, 2022. Acting on this information, the individuals sold off all their HYBE shares, reportedly avoiding losses of over ₩230 million KRW (about $166,000 USD) in total.

In the entertainment industry, an artist’s activities have a major impact on company performance. The decision to pause group activities is extremely sensitive information. This crime undermines the fairness of the capital market and deserves strong public criticism.

— Seoul Southern District Court

HYBE Stock Value Drops 25% Following News Of BTS’s Next Chapter Of Activities

The day after BTS’s announcement, HYBE’s stock price dropped by 24.78%.

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