Jung Yong Hwa has been cleared of insider trading allegations following an investigation. Earlier this week, news surfaced that Yong Hwa was being investigated for insider trading and stock manipulation.
The investigation was initiated after reports that Yong Hwa purchased around 400 million Won (about $350,000) worth of FNC Entertainment stocks after news that the company was able to sign up major talent Yoo Jae Suk. Yong Hwa allegedly sold the stocks a week after to earn 200 million Won ($173,000).
Insider trading is a violation of Korea's Capital Market Act, since it constitutes buying stocks based on confidential information.
According to Soompi, Yong Hwa has been cleared after an investigation revealed that he purchased the stocks even before there were discussions about recruiting Jae Suk. Yong Hwa apparently had no knowledge about FNC's intent to sign Jae Suk, and so the purchase was done in good faith.
Yong Hwa reportedly leaves his mother in charge of his finances, and it was his mother, without his knowledge, who purchased the said FNC stocks. The stocks were sold after Yong Hwa heard that the entertainment giant signed Jae Suk.
His fellow CNBLUE member, Lee Jong Hyun, who was also investigated for insider trading, was not so lucky and was fined 20 million Won ($17,000).
According to Soompi, Jong Hyun purchased the stocks when he heard the news of the signing of Jae Suk from an acquaintance on July 15, 2015. He admitted not checking if the news has been reported already but stated that once he realized the legal implications of his purchase, he decided to hold on to the stocks and that cost him some money. The prosecution granted him a summary indictment after concluding that he has reflected deeply on his wrongs.
