U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22693 / May 1, 2013
Securities and Exchange Commission v. Well Advantage Limited, et al., Civil Action No. 12-CV-5786 (SDNY)(RJS)
Foreign Trader Agrees to Settle SEC Charges in Nexen Insider Trading Case
A Singapore businesswoman whose assets were frozen last year as part of a major insider trading action has agreed to pay more than $500,000 to settle charges that she purchased shares of Nexen Inc. while in possession of nonpublic information about the company's impending acquisition by China-based CNOOC Ltd.
In July 2012, the SEC obtained an emergency court order freezing multiple Hong Kong and Singapore-based trading accounts just days after the Nexen acquisition was announced and suspicious trading in Nexen securities was detected. The SEC's complaint alleged that in the days leading up to the announcement, Hong Kong-based firm Well Advantage Limited and other unknown traders purchased Nexen stock based on confidential details about the acquisition.
In the weeks that followed, the SEC's investigation identified Singapore resident Choo Eng Hong, an executive at a privately owned furniture manufacturing business, as one of the previously unknown traders charged in the complaint. Brokerage records obtained by the SEC show that Choo loaded up on Nexen stock and contracts for difference (CFDs) in the last three trading days before the announcement of the Nexen acquisition, and that she generated profits of over $400,000 after the news was made public.
Under the terms of the settlement, which is subject to court approval, Choo has agreed to the entry of a final judgment requiring her to pay disgorgement of her ill-gotten gains of $466,477.62 and a penalty of $100,000, and permanently enjoining her from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Ms. Choo neither admits nor denies the SEC's allegations.
In October 2012, the SEC announced a settlement with the lead defendant, Well Advantage, which agreed to pay more than $14.2 million to settle the insider trading charges. More recently, in March 2013, the SEC announced that a Hong Kong-based broker, her husband, and her brokerage clients agreed to pay more than $3.3 million to settle the SEC's claims.