employees of the agency of the famous South Korean group BTS indicted for insider trading

In 2022, shares of the BTS group fell sharply after announcing a career break. The employees being sued sold their shares just before.

Three employees of subsidiaries of Hybe, the South Korean agency of K-pop megastars BTS, have been indicted for alleged insider trading, prosecutors said Thursday. The South Korean prosecutors accuse them of selling shares in the iconic boy band’s company when they knew they would plummet.

In a video posted in June 2022, BTS announced to fans that they were taking a break to focus on their solo careers, citing exhaustion and the pressures of their stratospheric success.

Many analysts at the time believed that the break was a strategic choice, as the members of the group were about to undergo their mandatory military service, which lasts 18 months in South Korea. The seven stars subsequently announced their military service one after the other, with the oldest member, Jin, having recently completed his period.

The company’s stock price fell nearly 25% as the stock market opened after the release of the 2022 video, shaving nearly 2 trillion won ($1.4 billion) off its stock. capitalization.

The three employees learned of the announcement and sold their shares before it was made public, avoiding losses ranging from $24,063 to $108,100, according to a statement from the Seoul Southern District Prosecutor’s Office.

These employees worked for BTS for between eight and ten years, and were therefore “able to obtain this important information” who could “have a significant impact on investment decisions”. They were in charge of various tasks, such as BTS’s music videos, hair and clothing, as well as logistical planning, according to the statement.

The prosecution announced that it would “to crack down severely” against the use “material information not disclosed by insiders”which gave them an asymmetric advantage in the stock market.