[Alpha Biz= Paul Lee] The Financial Services Commission (FSC) of South Korea has launched an investigation into allegations that an SBS employee engaged in insider trading by using non-public information related to a strategic partnership with Netflix.
On July 15, FSC officials conducted a search and seizure at the SBS headquarters after identifying that the employee, referred to as Mr. A, had purchased a significant number of SBS shares in advance of a major business announcement. Mr. A is suspected of having prior knowledge that SBS was set to enter into a six-year content supply agreement with Netflix, covering new drama, entertainment, and educational programming.
SBS officially announced the partnership on December 20, 2023. Following the news, the company’s stock price hit the daily upper limit for two consecutive trading sessions. Authorities believe Mr. A sold his shares after the announcement, realizing substantial profits.
Under Korea’s Capital Markets Act, it is illegal for listed company employees to trade shares using undisclosed material information obtained through their job duties. Violations can result in imprisonment for up to one year or fines amounting to four to six times the illicit gains.
SBS released an internal statement acknowledging the investigation, stating:
“We were notified by the FSC that one of our employees was under investigation. Upon internal review, it was confirmed that the employee used undisclosed information acquired through their position to trade company shares. The individual has been immediately dismissed, and SBS is cooperating fully with the authorities.”
The FSC is also expanding its investigation, suspecting that other employees may have engaged in similar misconduct.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
