SEC may sue Li of Dow Jones

Dow Jones & Co. director David Li was told by U.S. regulators that they might seek to sue him in connection with a probe of suspected insider trading ahead of News Corp.’s offer to buy the company, a person with direct knowledge of the matter said.

The Securities and Exchange Commission gave Li a so-called Wells Notice, indicating that the agency’s investigators plan to recommend legal action against him, said the person, who declined to be identified because the warning wasn’t public. The notice gives Li a chance to dissuade the SEC from proceeding.

Dow Jones publishes the Wall Street Journal, which said Li was connected to a family member of a Hong Kong couple sued by the SEC in May for insider trading.

Dow Jones spokeswoman Linda Dunbar and SEC spokesman John Heine declined to comment. There was no answer at Li’s office in Hong Kong.