Securities and Exchange Commission Civil Action No 11 CV 8605.
Presented without comment, obv.
SEC FREEZES ASSETS OF FOUR CHINESE CITIZENS CHARGED WITH INSIDER TRADING
On December 5, 2011, the Securities and Exchange Commission charged four Chinese citizens and a Chinese-based entity with insider trading and obtained an emergency court order to freeze their assets after they reaped more than $2.7 million in profits by trading in advance of a recent public announcement of a merger agreement between London-based Pearson plc and Beijing-based Global Education and Technology Group, Ltd.
The SEC’s complaint names Sha Chen, Song Li, Lili Wang, Zhi Yao, All Know Holdings Ltd., and one or more unknown purchasers of Global Education stock as defendants. The SEC alleges that they purchased American Depository Shares (ADS) of Global Education in the two weeks leading up to a November 21 public announcement of a planned merger between the two education companies. Some of the defendants’ brokerage accounts were dormant until they bet heavily on Global Education shares, and some of the purchases made either equaled or exceeded the stated annual income of that trader. After the agreement was announced, they immediately began selling some of their Global Education shares. Their illicit gains totaled more than $2.7 million.
According to the SEC’s complaint, filed in the U.S. District Court in Chicago, Pearson and Global Education each announced before trading began on November 21 that Pearson agreed to acquire all of Global Education’s outstanding stock for $294 million ($11.006 per share traded in the U.S.). Global Education’s stock price increased 97 percent that day, from $5.37 to $10.60.
Here’s the complaint:
