SEC: Insider trading ahead of Nexen takeover

The Securities and Exchange Commission filed a complaint in court against a firm controlled by a Chinese billionaire and other traders, accusing them of making more than $13 million from insider trading ahead of a bid by China's CNOOC for Canadian oil company Nexen Inc.

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

They made trading profits of $7 million and $6 million respectively by using inside knowledge of the merger to buy Nexen shares before the announcement, the SEC says.

The trading was suspicious, the SEC claims in its complaint, 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 July 23 it had agreed to acquire Nexen for $15.1 billion, China's biggest foreign takeover bid. Shares of Nexen jumped almost 52 percent that day.

The SEC does not allege any wrongdoing by Zhang, but notes that he is the controlling shareholder of a company that engages in significant business activities with CNOOC.

A spokeswoman for CNOOC declined to comment. Calls to Well Advantage's office in Hong Kong were not answered Saturday.-- Reuters