Settlement in insider trade case

Former Dow Jones & Co. director David Li and two other Hong Kong residents have agreed to pay more than $24 million to settle a U.S. probe of alleged insider trading before last year’s takeover of the media company by News Corp.

Li, chairman of Bank of East Asia Ltd. and a Hong Kong legislator, will pay an $8.1-million fine to settle allegations that he tipped off close friend Michael Leung a day after learning of the pending bid in April, the Securities and Exchange Commission said.

Leung, allegedly helped by his daughter and son-in-law, bought $15 million in Dow Jones stock before the offer became public, the agency said.

Shares of Dow Jones surged 55% when News Corp. unveiled its bid May 1.

Li “knew, or was reckless in not knowing, that he conveyed nonpublic information” to Leung, the SEC said in its complaint.

The case “makes clear that the SEC will move fast, and decisively, not only in the United States but around the world to protect investors,” SEC Chairman Christopher Cox said.

Michael Leung agreed to pay $8.1 million and the same amount in restitution. His son-in-law, Kan King Wong, accused of reaping an additional $40,000 by buying shares in a separate account at TD Ameritrade Holding Corp., agreed to forfeit that profit and pay another $40,000 as a fine.

Leung’s daughter, Charlotte Wong, who is married to Kan King Wong, was also a defendant in the case and part of the settlement. She wasn’t required to pay any money but agreed to refrain from securities law violations.

The four didn’t admit or deny wrongdoing in settling the SEC’s complaint.

An attorney for the Wongs declined to comment, as did a Dow Jones spokesman. Lawyers for Li and Michael Leung couldn’t be reached.

Li, 68, has served on dozens of public and private boards in Hong Kong, according to the SEC.

The settlement doesn’t bar him from serving as an officer or director at a U.S. company, a sanction often imposed on directors in insider-trading cases.