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Hybe employee under probe for allegedly earning 240 million won via insider trading
The Seoul Metropolitan Police Agency submitted a warrant request to prosecutors on Wednesday for the search and seizure of Hybe’s office, according to reports Thursday. The latest request is linked to allegations against Hybe founder and Chair Bang Si-hyuk.
The Financial Supervisory Service has reportedly obtained evidence that Bang misled shareholders in 2019 by stating the company had no plans to go public, only to later proceed with an initial public offering.
Bang is suspected of persuading shareholders to sell their stakes to a private equity fund allegedly set up by an associate, under the false premise that Hybe would remain private. The fund then reaped a large profit after the company went public. The alleged gains from the scheme are estimated at around 400 billion won ($290 million).
Separately, prosecutors recently raided the headquarters of Hybe in Seoul in connection with an insider trading probe involving one of its employees, local media reported Thursday.
The employee is under investigation for allegedly using nonpublic information to reap approximately 240 million won in illicit profits.
Prosecutors believe the employee purchased shares of YG Plus in advance after learning in January 2021 that Hybe, which was then Big Hit Entertainment, would invest in the company. The stock surged following the investment announcement. YG Plus is a publicly traded media and advertising company under YG Entertainment.
This is not the first time Hybe and its affiliates have faced allegations of securities law violations.
In 2022, several employees of a Hybe subsidiary were indicted without detention on similar charges. They were accused of selling Hybe shares before a public announcement in June 2022 that BTS would go on a hiatus, helping them avoid roughly 200 million won in losses.
