The U.S. Securities and Exchange Commission (SEC) has frozen another US$6.5 million in assets of traders that it alleges were involved in illegal insider trading ahead of the recently announced acquisition of Canada’s Nexen Inc.
The SEC announced that it has obtained an emergency court order in the U.S. District Court for the Southern District of New York to freeze more than US$6 million in assets of additional unknown traders, who it says made approximately US$2.3 million in illegal profits by trading in advance of the announcement that China-based CNOOC Ltd. had agreed to acquire Nexen for approximately US$15.1 billion.
In the days following the acquisition announcement, the SEC filed an initial complaint in federal district court alleging that Hong Kong-based Well Advantage Ltd. and other unknown traders had traded Nexen stock based on nonpublic information about CNOOC’s impending acquisition of Nexen and reaped a total of more than US$13 million in illicit trading profits. Initially, it obtained a court order freezing assets valued at more than US$38 million.
The SEC has since amended its complaint adding allegations that additional unknown traders also traded on the information. It is now also seeking an order that the traders to disgorge their ill-gotten gains with interest and pay financial penalties, and permanently barring them from future violations. None of the allegations in the case have been proven.