SEC charges 4 with Dow Jones insider trading

The SEC reached a $24 milllion insider trading settlement with 4 people who attempted to capitalize on News Corp.'s buyout of Dow Jones & Co.

NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission announced Tuesday it had reached a $24 million settlement with a former Dow Jones & Co. board member and three Hong Kong residents in an insider trading suit.

The charges included illegal tipping and insider trading ahead of the May 1 reports about News Corporation's (NWS, Fortune 500) unsolicited $5 billion offer to buy The Wall Street Journal's parent company, Dow Jones.

The SEC's complaint alleges that David Li Kwok Po, a Dow Jones board member at the time who also is Chairman and CEO of the Bank of East Asia and a member of Hong Kong's Legislative Counsel and Executive Committee, illegally tipped off his close friend Michael Leung Kai Hung about the upcoming deal. Leung, according to the report, along with his daughter Charlotte Ka On Wong Leung and son-in-law Kan King Wong, bought approximately $15 million worth of Dow Jones securities before the bid was announced.

They would have received approximately $8 million from the buyout had the SEC not frozen their accounts shortly before the News Corp. deal went through.

"This case makes clear that the SEC will move fast, and decisively, not only in the United States but around the world to protect investors from insider dealings and threats to fair and open markets," said SEC Chairman Christopher Cox.

As part of the settlement, Li will pay an $8.1 million penalty, Michael Leung will pay $16.2 million, and K.K. Wong will pay $80,000.

This is not the first time the Wongs have been investigated by the SEC: the Commission filed an emergency action against the Wongs on May 8, 2007, for alleged trading on inside information.