Journal Offer Prompted Insider Trading, SEC Says

By Colleen Barry,  Newser Staff
Posted May 9, 2007 6:50 AM CDT
Journal Offer Prompted Insider Trading, SEC Says
Dow Jones Co., publisher of the Wall Street Journal, said Tuesday it received an unsolicited bid from Rupert Murdoch's News Corporation to buy the company for $5 billion. The news sent shares of News Corp. soaring and those of other newspaper higher. (AP Photo/Kathy Willens)   (Associated Press)

The SEC has filed its first suit for insider trading involving Rupert Murdoch's bid to buy the Wall Street Journal's parent company. The agency alleges a Hong Kong couple knew about the offer when they bought $15 million of Dow Jones stock in April and sold it for an $8.18 million profit after the announcement two weeks later.

Dow Jones stock leapt 58% on news of the Murdoch move. Though the SEC didn't speculate on how Kan King Wong and Charlotte Ka On Wang Leung picked up the confidential info in advance, the Journal itself reports that a Dow Jones director, David Li, had a close professional and social relationship with Ms. Wong. (More Rupert Murdoch stories.)

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