By: E&P Staff
The Securities and Exchange Commission (SEC) has notified a Dow Jones & Co. board member that it intends to file civil charges related to an alleged insider-trading scheme in which a Hong Kong couple bought up stock before Rupert Murdoch’s bid for the financial reporting giant became public knowledge.
On its Web site Wednesday afternoon, the Wall Street Journal in an article by Sarah Ellison and Kara Scannell reported that the SEC has served a so-called Wells notice to Dow Jones board director David Li, chairman and chief executive of Bank of East Asia Ltd.
In a civil lawsuit filed in May, the SEC charged that Kan King Wong and his wife Charlotte Ka On Wong Leung bought 415,000 shares of Dow Jones after News Corp. Chairman Murdoch notified top company executives of his offer to buy, but two weeks before the bid was publicly disclosed. Murdoch’s bid of $60-per-share or $5 billion for Dow Jones sent its languishing stock price soaring after the disclosure.
According to the Journal, Li, who is also based in Hong Kong, has business and social relationships with the accused couple through a family member of theirs who was charged with insider trading in another transaction earlier this year.
The news of the Wells letter comes as Dow Jones’ board agreed in principle to accept Murdoch’s offer for the company. Final approval for the deal must come from the controlling Bancroft family shareholders.