S.E.C. to Probe Dow Jones Director on Insider Trading

The Securities and Exchange Commission has given notice to Dow Jones board member David K.P. Li that he will be investigated for insider trading after a couple to whom he is "indirectly linked" made $8.2 million in a matter of days by buying Dow Jones stock immediately before news leaked that Rupert Murdoch's News Corp. was planning a takeover bid.

The New York Times' Richard Perez-Pena reports:

 

 

On May 8, the commission filed an insider-trading complaint against Kan King Wong and Charlotte Ka On Wong Leung, a husband and wife who live in Hong Kong. The complaint, filed in federal court in Manhattan, stated that from April 13 to April 30, they bought $15 million worth of Dow Jones stock at about $36 a share.

 

The purchases appeared to be far beyond the couple’s means, regulators said. More than $4.8 million was paid with margin loans, and almost $7.2 million was wired to their Merrill Lynch accounts in mid-April.

At least one deposit, almost $3.2 million, was wired to them by Ms. Leung’s father, Michael Leung Kai Hung, on April 18. Mr. Leung has a number of business and social ties to Mr. Li, the Dow Jones director, including a seat on the board of the Canadian subsidiary of Mr. Li’s bank.