Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, October 18, 2012

Hong Kong Firm Agrees to Pay $14 Million to Settle Insider Trading Charges

The SEC announced that Well Advantage, a Hong Kong-based firm charged with insider trading in July, has agreed to settle the case by paying more than $14 million, double the amount of its alleged illicit profits. The proposed settlement is subject to judicial approval.

The SEC filed an emergency action against Well Advantage to freeze its assets less than 24 hours after the firm placed an order to liquidate its entire position in Nexen Inc. The SEC alleged that Well Advantage had stockpiled shares of Nexen stock based on confidential information that China-based CNOOC Ltd. was about to announce an acquisition of Nexen. Well Advantage sold those shares for more than $7 million in illicit profits immediately after the deal was publicly announced. Well Advantage is controlled by prominent Hong Kong businessman Zhang Zhi Rong, who also controls another company that has a "strategic cooperation agreement" with CNOOC.

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