NEW YORK, Oct 18 (Reuters) - A Hong Kong-based firm has agreed to pay more than $14 million to settle charges of trading on inside knowledge of CNOOC Ltd’s bid for Nexen Inc , the U.S. Securities and Exchange Commission said on Thursday.
The SEC said Well Advantage proposed to pay back the illegal profits made on the trades, plus a penalty worth the same amount.
The proposed settlement requires court approval.
The SEC in July charged Well Advantage, a firm controlled by Zhang Zhirong with buying shares of Canada’s Nexen stock based on confidential information that China’s CNOOC was about to announce an acquisition of Nexen.
CNOOC said on July 23 it had agreed to acquire Nexen for $15.1 billion, China’s biggest foreign takeover bid. Shares of Nexen jumped almost 52 percent that day.
Well Advantage sold the Nexen shares for more than $7 million immediately after the deal was publicly announced, the SEC said.
Zhang Zhirong, who was not charged, is chairman of China Rongsheng Heavy Industries Group Holdings, a sh ipbuilder that has a st rategic cooperation agreement with CNOOC.
A lawyer representing Well Advantage, Alan Brudner of Paul Hastings in New York, declined to comment on the proposed settlement because it is pending before a federal judge.
If the proposal is accepted by the judge, Well Advantage will settle without admitting or denying the charges.
“If approved by the court, Well Advantage has agreed to give up all of its ill-gotten profits from these trades and pay a substantial penalty on top of that,” Sanjay Wadhwa, deputy chief of the SEC Enforcement Division’s Market Abuse Unit and associate director of the New York Regional Office, said in a press release.
The SEC said the investigation is continuing.