Previously, an FNC Entertainment artiste was accused of insider trading and was reportedly under investigations for obtaining profits unfairly.
The company denied the allegations, but as it turns out, the celebrity in question is CNBLUE’s frontman Jung Yonghwa, and he has been summoned by a chief prosecutor to aid investigations.
The singer was called in yesterday (Tuesday, 28th June) by the financial sector of Seoul’s District Public Prosecutor’s Office. He was questioned for allegedly buying and selling 21,000 shares of FNC Entertainment’s stocks, earning 200 million Won (around RM700,000) in the process, after learning that a top South Korean star will be joining the company.
The 21,000 shares, which were worth 400 million Won (around RM1.3 million), were sold later that week for 600 million Won (around RM2 million).
The top celebrity is speculated to be comedian/host Yoo Jaesuk, as on 16th July 2015, the day when he joined the company, each share of FNC Entertainment’s stocks rose from 20,800 Won (around RM72) to 27,000 Won (around RM94).
An affiliate of FNC Entertainment refused to comment further on the issue, saying:
The prosecution is investigating this case and we believe that it is wrong to reveal any information to outsiders of the investigative agency.
Authorities are now investigating when and how the CNBLUE singer obtained the information, looking into detailed accounts of the stock deal and also determining whether the crime happened.
Last week, a finance investigation team from the prosecutor’s office was reported to have seized and searched the home of a celebrity, a friend, the agency, and several other locations in relation to the case.
UPDATE (30th June, 11:40am):
Oh no, at least 2 more people are being investigated for insider trading, and 1 of them is allegedly a CNBLUE member :(
Frontman Jung Yong Hwa was brought in for inquiry last July, but only this month, it was revealed that 1 or 2 others were suspected of the same crime and are currently being investigated. No names were revealed, but sources disclosed that FNC Entertainment’s CEO and representative Han Sung Ho as well as another CNBLUE member are also under investigations.
Jung’s mother was also accused of buying the stocks with her son.
FNC Entertainment is currently home to a slew of singers, actors, and comedians, namely CNBlue, FT Island, Jung Hyundon, AOA, Juniel, Lee Dong Gun, and more.
Insider trading is a type of stock manipulation and it is illegal as other stockholders do not know of the information beforehand, thus giving an unfair advantage to those who have been told. The act also violates Korea’s Capital Market Act.