BTS agency employees charged for insider trading
Fans of K-pop boy band BTS pose in front of a coach during the annual BTS FESTA, organised by HYBE, the band’s agency, in Seoul on June 13, 2024, a day after band member Jin was discharged from his South Korean military service, the first member of the band to complete the mandatory duty, freeing him up to fully resume musical activities. (Photo by ANTHONY WALLACE / AFP)
SEOUL, South Korea — Three employees at affiliates of HYBE, the agency behind K-pop megastars BTS, have been charged without detention for alleged insider trading, prosecutors said Thursday.
BTS members told fans on June 14, 2022, that they were taking a break from the supergroup to focus on their solo careers, citing exhaustion and the pressures of their stratospheric success.
Many analysts said at the time the hiatus was strategic, with South Korea’s mandatory 18-month military service looming for band members.
The company’s share price fell nearly 25 percent when the market opened the day after the announcement, wiping nearly 2 trillion won ($1.4 billion) off its value.
Prosecutors said three employees who had prior knowledge of the announcement sold their shares before it was made public, avoiding losses ranging from around $24,063 to $108,100.
The employees worked for BTS for eight to 10 years since the group’s debut, and therefore were “able to obtain this material information” that could “significantly impact investment decisions”, Seoul Southern District Prosecutor’s Office said in a statement sent to AFP.
The three had worked in a team involved in producing BTS music videos, hair and clothing, as well as another protocol planning team, the statement said.
HYBE’s plans for the 2022 announcement constituted “undisclosed material information”, as it was a “confidential matter that only high-ranking officials and a few work-related personnel were aware of”, it added.
The prosecutor’s office said it will “sternly crack down” on the use of “undisclosed material information by corporate insiders”, who “exploit informational asymmetries to undermine the fair order of the stock market.”
HYBE shares closed up 0.30 percent in Seoul on Thursday.
