David Li, chairman and CEO of family-owned Bank of East Asia, has paid an $8.1 million civil penalty to the US Securities and Exchange Commission to settle an insider trading case.
In May 2007 the SEC launched charges against Li and three other individuals for illegal tipping and trading in the securities of Dow Jones & Company in the weeks before the public disclosure of an unsolicited acquisition offer by News Corporation. The amount paid by all four individuals totals $24 million.
Li, who served on the Dow Jones board of directors, was accused of being the source of an alleged tip made to husband-and-wife team KK and Charlotte Wong, who in turn are accused of purchasing approximately $15 million worth of Dow Jones securities. After the offer became public, the couple made approximately $8.1 million in trading profits.
The SEC have since filed an amended complaint alleging that Li tipped his close friend, Michael Leung, before the offer's public disclosure, who, with the Wongs' assistance, traded Dow Jones stock in their bank account.
Without admitting or denying the SEC's allegations, Li, Leung and the Wongs have agreed to pay their respective fines.