The following is an excerpt from Reuters.com | July 28, 2012 |
(Reuters) – The U.S. securities regulator filed a complaint in court on Friday against a firm controlled by a Chinese billionaire and other traders, accusing them of making over $13 million from insider trading ahead of a bid by China’s CNOOC for Canadian oil company Nexen Inc.
The Securities and Exchange Commission said the federal court in Manhattan had frozen assets worth over $38 million belonging to Hong Kong-based Well Advantage, controlled by businessman Zhang Zhirong, and other unnamed traders who used accounts in Hong Kong and Singapore to trade in Nexen stock.
They made trading profits of $7 million and $6 million respectively by using inside knowledge of the merger to buy Nexen shares before the announcement, the SEC says.
The trading was suspicious, the SEC claims in its complaint, because the accounts used to buy the shares had ‘either no history or extremely limited history” of buying Nexen shares before July 2012.
CNOOC said on July 23 it had agreed to acquire Nexen for $15.1 billion, China’s biggest foreign takeover bid. Shares of Nexen jumped almost 52 percent that day.
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