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Rongsheng boss accepts hefty fine for insider trading
By Richard Fu |
October 19, 2012, Friday
|
Online Edition
Online Edition
A Hong Kong-based company controlled by the chairman of China's largest private shipbuilder has agreed to pay more than US$14 million to settle an insider trading case with the US securities regulator.
The US Securities and Exchange Commission froze the assets of Well Advantage Ltd in July after finding the firm sought to liquidate its entire position in Nexen Ltd, a US-listed Canadian oil producer that is the acquisition target of China's CNOOC Ltd.
The SEC alleged that Well Advantage had stockpiled shares of Nexen based on confidential information before the takeover bid was announced on July 23 when Nexen's share price jumped more than 50 percent.
Well Advantage agreed to pay double the amount of its illicit earnings to the SEC. The proposed settlement is subject to court approval in New York, the SEC said today.
"If approved by the court, Well Advantage has agreed to give up all of its ill-gotten profits from these trades and pay a substantial penalty on top of that," said Sanjay Wadhwa, deputy chief of the SEC Enforcement Division's Market Abuse Unit. "The speedy resolution of this case shows the serious consequences that await traders who engage in insider trading."
Well Advantage is controlled by Zhang Zhirong, chairman and founder of China Rongsheng Heavy Industries Group Holdings Ltd. Rongsheng counts CNOOC, China's largest offshore oil producer, as a client and CNOOC was also a cornerstone investor in Rongsheng's 2010 Hong Kong IPO.
The US Securities and Exchange Commission froze the assets of Well Advantage Ltd in July after finding the firm sought to liquidate its entire position in Nexen Ltd, a US-listed Canadian oil producer that is the acquisition target of China's CNOOC Ltd.
The SEC alleged that Well Advantage had stockpiled shares of Nexen based on confidential information before the takeover bid was announced on July 23 when Nexen's share price jumped more than 50 percent.
Well Advantage agreed to pay double the amount of its illicit earnings to the SEC. The proposed settlement is subject to court approval in New York, the SEC said today.
"If approved by the court, Well Advantage has agreed to give up all of its ill-gotten profits from these trades and pay a substantial penalty on top of that," said Sanjay Wadhwa, deputy chief of the SEC Enforcement Division's Market Abuse Unit. "The speedy resolution of this case shows the serious consequences that await traders who engage in insider trading."
Well Advantage is controlled by Zhang Zhirong, chairman and founder of China Rongsheng Heavy Industries Group Holdings Ltd. Rongsheng counts CNOOC, China's largest offshore oil producer, as a client and CNOOC was also a cornerstone investor in Rongsheng's 2010 Hong Kong IPO.
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