The financial market inherently demands absolute transparency and fairness, especially when insider information can significantly impact stock value and investor confidence. This is no exception for the South Korean entertainment industry, where major publicly listed companies like HYBE operate.

Information related to artist activities—particularly those involving top-tier names like BTS—is considered extremely sensitive. Every move, no matter how small, concerning the "21st-century pop icons" can trigger major financial fluctuations for this leading entertainment conglomerate.

This was most clearly demonstrated in 2022, when there were numerous reports surrounding BTS's military enlistment plans and the group's future. At one point, HYBE’s stock value dropped by 25%, losing 2 trillion KRW in market capitalization following the announcement that BTS would suspend group activities to focus on solo projects and fulfill their military duties.

Part of this severe decline also stemmed from the fact that some employees at HYBE’s subsidiaries leaked information about BTS before it was made public, causing confusion among investors. Recently, the Seoul Southern District Court has issued a final ruling on these employees.

Specifically, on July 22, the Seoul Southern District Court officially ruled against three former employees from HYBE’s subsidiaries, charging them with violating South Korea’s Capital Markets Act through unfair trading based on undisclosed information.

Mr. Kim (age 37), a former employee of Source Music—a company under HYBE Labels—was sentenced to 10 months in prison, suspended for two years. In addition, he was fined 231 million KRW (approximately 167,000 USD).

The other two individuals, Mr. Lee (age 33), a former employee of BIGHIT MUSIC, and Mr. Kim (age 41), who worked at BeLift Lab, were each sentenced to six months in prison, suspended for two years. Mr. Lee was fined 51 million KRW (around 36,900 USD), and Mr. Kim was fined 65 million KRW (about 47,000 USD).

In addition to the fines, the court also ordered all three to pay restitution for the unlawful profits they had gained through insider trading. In its statement, the Seoul Southern District Court emphasized:

“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.”

According to the investigation, the three individuals had prior knowledge of a video scheduled for release on June 14, 2022—in which BTS announced the suspension of group activities due to member Jin’s enlistment. This information directly affected HYBE's stock price at the time (a 25% drop as mentioned above), as the temporary halt of the agency’s flagship group was a major shock to both partners and investors.

Having access to this undisclosed information, the three quickly sold off all the HYBE shares they held, in an attempt to avoid an estimated loss of over 230 million KRW (approximately 166,000 USD). This act was deemed a serious violation of transparency and fairness principles in the stock market.

The incident highlights a serious ethical breach within publicly listed entertainment companies, especially as this industry becomes increasingly intertwined with the financial market. It also serves as a wake-up call—not only for HYBE but for the entire South Korean entertainment sector—that ensuring transparency, fairness, and ethical standards within corporate structures is essential for maintaining public and investor trust.