Chinese billionaire faces claims in US of insider trading

By ERIKKA ASKELAND
Published on 30/07/2012 00:00

AMERICA’S financial watchdog has filed a complaint in court against a firm controlled by a Chinese billionaire and other traders, accusing them of making more than $13 million (£8m) from insider trading ahead of a bid by China’s CNOOC for Canadian oil firm Nexen.

The Securities & Exchange Commission (SEC) said the federal court in Manhattan had frozen assets worth more than $38m belonging to Hong Kong-based Well Advantage, controlled by businessman Zhang Zhirong, and other unnamed traders who used accounts in Hong Kong and Singapore to trade in Nexen stock.

They made trading profits of $7m and $6m respectively by using inside knowledge of the merger to buy Nexen shares before the announcement, the SEC said. The trading was suspicious because the accounts used to buy the shares had “either no history or extremely limited history” of buying Nexen shares before July 2012.

CNOOC said on 23 July it had agreed to acquire Nexen for $15.1 billion.