Hyundai Executives Investigated for Insider Trading After Apple Car Talks: Report
The auto group's stock prices soared after its rumored tie-up with Apple and a dozen suits allegedly capitalized for a big payday.
Remember when Hyundai and Apple seemed really close to making a car together? It was a few months ago now, but the hype was real. Hyundai seemed like a good candidate to build an EV for the California-based electronics giant, and with Apple Car rumors reaching a fever pitch, it seemed like it might actually happen this time.
It wasn't meant to be but that didn't stop Hyundai's stock from making a big jump with news it might collaborate with one of the most valuable companies in the world. Following this spike, a dozen Hyundai executives reportedly sold stock worth around $712,000, and now they're being investigated by South Korea's Financial Services Commission for alleged insider trading, as the Korea Herald reports.
When news that the two companies might team up made headlines, the Korean automaker's stock price jumped from around $42 to $71, a massive increase of nearly 60 percent. This was followed by weeks of speculation which ended with the two companies deciding it was probably for the best if they didn't work together.
The sale of 3,402 total shares reportedly took place after this initial spike, but the company's stock price was still riding the high for weeks after the announcement. All of the tradings by Hyundai executives allegedly took place from Jan. 11-27, so during this period of inflated value but after the massive initial gains.
According to sources speaking to the Korea Herald, the country's Financial Supervisory Service or market research division of the Financial Services Commission will lead the investigation, with it expected to last around six months. If the investigation finds that Hyundai executives used undisclosed information illegally, they will submit their probe to the FSC. Full-on criminal charges seem rather unlikely, however.
Hwang Seiwoon, a researcher at Korea's Capital Markets Institute, told the Financial Times, “Their stock trades look quite suspicious if you look at the circumstances, but it is hard to prove that they used inside information.”
“I have hardly seen any cases where the alleged perpetrators have seriously been punished for insider trading," Seiwoon added.
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