Several employees under HYBE Labels are being investigated for alleged stock trading using insider information.
According to sources in the industry on April 28th, investigators have discovered and are investigating several employees of HYBE on suspicion of selling company shares to earn a large sum of money, just before BTS unexpectedly released a video announcing the suspension of group activities.
The pre-recorded video, titled “BTS Dinner Party”, was publicly posted on the group’s YouTube channel on June 14th. The next day, June 15th, HYBE’s stock price plummeted by 25%, causing approximately 2 trillion won in market capitalization to evaporate.
However, even before the video release on June 13th and 14th, HYBE’s stock price had fallen by 11% and 3%, raising suspicions among minority shareholders that some employees had taken advantage of “insider information” they knew to sell shares for profit.
The unexpected disclosure of information that severely affected the company’s revenue without any prior notice has also sparked controversy. As allegations of insider trading are under investigation, it is expected that the unclear management practices of entertainment companies as a whole may come under scrutiny.
Meanwhile, the Special Capital Market Police of the Financial Supervisory Service are also investigating Kakao and SM Entertainment regarding the acquisition of SM Entertainment’s shares, after emerging accusations of Kakao artificially manipulating market prices to prevent the public purchase of HYBE shares.
Source: K Crush