U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20447 / February 5, 2008
Securities and Exchange Commission v. Kan King Wong, Charlotte Ka On Wong Leung, Michael Leung Kai Hung and David Li Kwok Po, 07 Civ. 3628 (SAS) (S.D.N.Y. filed May 8, 2007)
SEC Settles $24 million Insider Trading Case Against Four Hong Kong Residents Including David Li Kwok Po, a Former Board Member of Dow Jones
The Securities and Exchange Commission today announced settled insider trading charges against four Hong Kong residents for illegal tipping and trading in the securities of Dow Jones & Company, Inc. ("Dow Jones") in the weeks before the public disclosure on May 1, 2007 of an unsolicited $60 per share acquisition offer for Dow Jones (the "Offer") by News Corporation. The alleged tip originated with David Li Kwok Po ("David Li"), who served on the Dow Jones board of directors. David Li is the Chairman and Chief Executive Officer of the Bank of East Asia and a member of Hong Kong's Legislative Counsel and Executive Committee.
On May 8, 2007, the Commission filed an emergency action in the United States District Court for the Southern District of New York against Kan King Wong ("K.K. Wong") and Charlotte Ka On Wong Leung ("Charlotte Wong"), alleging that the husband-wife couple traded Dow Jones securities based on inside information. Specifically, the Wongs purchased approximately $15 million worth of Dow Jones securities in their account at Merrill Lynch and, after the Offer became public, made approximately $8.1 million in trading profits. The court entered a Temporary Restraining Order freezing those assets and imposing other relief. See LR-20106 (May 8, 2007). Today the Commission filed an amended complaint alleging that Dow Jones board member David Li tipped his close friend, Michael Leung Kai Hung ("Michael Leung"), before the Offer's public disclosure, and Michael Leung, with the Wongs' assistance, traded Dow Jones stock in their Merrill Lynch account. The Commission further alleged that K.K. Wong bought 2,000 Dow Jones shares in his TD-Ameritrade account and made approximately $40,000 in profits. Charlotte Wong is Michael Leung's daughter, and K.K. Wong is his son-in-law.
Without admitting or denying the Commission's allegations, David Li, Michael Leung, K.K. Wong and Charlotte Wong consented to the entry of court orders enjoining them from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and ordering David Li to pay an $8.1 million civil penalty, Michael Leung to pay $8.1 million in disgorgement plus prejudgment interest and an $8.1 million penalty, and K.K. Wong to pay $40 thousand in disgorgement plus prejudgment interest and a $40 thousand civil penalty.
The Commission acknowledges the assistance of Merrill Lynch & Co. and the Hong Kong Securities and Futures Commission.
Cheryl J. Scarboro 202-551-4403
Reid A. Muoio 202-551-4488