SEC Freezes Additional Asset in Nexen Insider Trading Case

Kimberly Watson, Editor in Chief
August 08, 2012 /

The US Securities and Exchange Commission has obtained an emergency court order to freeze more than $6 million in assets of additional unknown traders who illegally profited $2.3 million from insider dealing.

The said traders allegedly traded before the July 23, 2012 announcement of China-based CNOOC Ltd’s acquisition of Canada-based Nexen Inc. for approximately $15.1 billion.

On July 27, 2012, just days after the acquisition announcement, the SEC charged Hong Kong-based Well Advantage Limited and other unknown traders for allegedly trading Nexen stock based on nonpublic information about CNOOC’s impending acquisition of Nexen.

According to the SEC, the traders reaped a total of more than $13 million in illicit trading profits. That same day, the SEC obtained a court order freezing the assets of the initial defendants valued at more than $38 million.

One week later, on Friday, August 3, 2012, the SEC filed an amended complaint adding allegations that additional unknown traders in possession of material nonpublic information purchased Nexen stock in the days leading up to the public announcement of its acquisition.

According to the SEC’s First Amended Complaint, the additional unknown traders opened a U.S. brokerage account through Hong Kong-based CSI Capital Management Limited only one week before the announcement and purchased 250,000 shares of Nexen stock during the following two days at a cost of approximately $4.2 million.

Immediately following the announcement, the unknown traders sold these shares for nearly $6.5 million, reaping approximately $2.3 million in illegal profits.

In connection with filing the First Amended Complaint, the SEC obtained another emergency court order freezing nearly $6.5 million in the assets of these additional traders, bringing the total value of assets frozen in this case to more than $44 million.


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