Tuesday, December 1, 2015   

Li 'to pay $62m' to settle insider case

Benjamin Scent

Tuesday, January 29, 2008


Bank of East Asia (0023) chairman David Li Kwok-po has reached a tentative agreement with the US securities regulator to pay more than US$8 million (HK$62.8 million) to settle insider trading allegations surrounding News Corp's acquisition of Dow Jones, according to a media report.

Li, a former Dow Jones board member, would neither admit nor deny any wrongdoing, The Financial Times quoted people familiar with the talks as saying.

When news of the investigation first surfaced in July, Li denied the allegations and vowed to vigorously defend himself.

The Securities and Exchange Commission has amassed circumstantial evidence that "potentially links Li" to unusual trading by others in Dow Jones stock before the May 1, 2007, announcement that News Corp planned to bid for Dow Jones, people familiar with the investigation were quoted as saying.

The SEC has charged a Hong Kong couple - Wong Kan-king and his wife Charlotte Wong Leung Ka-on - with fraud, alleging they bought US$15 million worth of Dow Jones stock on insider information. Li is a close friends of the woman's father, Michael Leung Kai-hung. The size of the fine to be levied on Li is linked to the amount of the Wongs' supposed profit, which the SEC says is about US$8 million.

Last November, Li sold a luxury house on The Peak for HK$202.8 million, reaping a paper profit of HK$22.8 million only eight months after he bought it.

The settlement negotiations were stalled for a time because Li refused to be barred from serving as a director of a public company in the United States, one of the punishments the SEC wanted to impose.

Li does not currently sit on the boards of any US companies but "absolutely refused" to agree to any ban, according to the report.

The proposed US$8 million settlement - with no such ban - is only preliminary and discussions are continuing, the insiders said.

A Bank of East Asia spokeswoman declined to comment. Li, who is on an official Hong Kong delegation to the Middle East, could not be reached for comment.

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