A Chinese couple that traded ahead of China-based CNOOC Ltd.’s acquisition of Canada’s Nexen Inc., has agreed to a settlement with U.S. regulators that will see them, and several clients, pay US$3.3 million in disgorgement and penalties.

The US Securities and Exchange Commission (SEC) announced that a Chinese businessman and his wife whose trading accounts were frozen last year as part of a major insider trading case have agreed to settle charges that they traded on inside information about the planned acquisition of Nexen.

The SEC obtained an emergency court order in July last year to freeze multiple Hong Kong and Singapore-based trading accounts just days after the Nexen acquisition was announced and suspicious trading in Nexen stock was detected. It alleged that in the days leading up to the deal’s announcement, Hong Kong-based firm Well Advantage Ltd. and other unknown traders purchased Nexen stock based on confidential details about the acquisition.

In October 2012, the SEC announced a settlement with Well Advantage, which agreed to pay more than US$14.2 million to settle the insider trading charges.

On Monday, the SEC said that its investigation has identified Ren Feng, and his wife Zeng Huiyu, as previously unknown traders charged in the complaint, as well as Ren’s private investment company, CT Prime Assets Ltd. and four of Zeng’s brokerage customers.

The settlement, which is subject to court approval, requires the traders to pay more than US$3.3 million combined. Ren and CT Prime agreed to the entry of a final judgment requiring them to jointly pay disgorgement of their ill-gotten gains of US$839,714, plus a penalty of US$839,714. Zeng agreed to a final judgment requiring her to pay disgorgement of US$202,030.22, and a penalty of US$202,030. And, Zeng also traded on behalf of four of her brokerage customers, who have agreed to disgorgement of their ill-gotten gains. The defendants neither admit nor deny the SEC’s allegations.

“This settlement requires full disgorgement of the insider trading profits of this group of foreign traders, and Ren and Zeng must additionally pay sizeable penalties,” said Sanjay Wadhwa, senior associate director of the SEC’s New York regional office. “This should send a stern warning to anyone contemplating insider trading in U.S. markets from abroad that the SEC uncovers such misconduct and the end result is a severe financial setback rather than a windfall.”