Nexen purchase by CNOOC tainted by insider trading probe: US SEC freezes assets of traders who reaped $13 million ahead of announcement
“The U.S. Securities and Exchange Commission obtained a court order to freeze assets of traders who allegedly reaped more than $13 million by trading illegally ahead of Cnooc Ltd. (883)’s announcement that it would buy Nexen Inc. (NXY)
Hong Kong-based Well Advantage Limited and other unknown traders stockpiled shares of Nexen based on confidential information about the deal, the SEC said in a July 27 statement announcing a complaint filed at federal court in Manhattan. The court order froze about $38 million in assets, the SEC said.
Nexen’s stock rose more than 50 percent on July 23 after Cnooc, China’s largest offshore oil and gas explorer, said it would pay $15.1 billion in cash to acquire the Calgary-based company in the biggest overseas takeover by a Chinese firm. The price was $27.50 for each common share, a premium of 61 percent to Nexen’s closing price on July 20, the previous trading day.
“Well Advantage and these other traders engaged in an all- too-familiar pattern of misusing inside information to place extremely timely trades and profit handsomely from their illegal acts,” Sanjay Wadhwa, deputy head of the SEC’s market abuse enforcement unit, said in a statement.
Almost all of the purchases of Nexen stock occurred during the seven trading days before the acquisition was announced, and the accounts used for the transactions had little or no history of buying Nexen shares. Well Advantage’s owner is controlling shareholder of a Hong Kong-based company that engages in significant business activities with Cnooc, the SEC said... “
Canada has increasingly become the exception as a government, in allowing Chinese State owned(or connected) companies to lobby our government closely; in allowing Chinese State owned companies to buy vast holdings in our national and natural resources as well as allowing them to buy into telecommunications in Canada, that provide services to our military. Other countries have put the brake on similar deals because of valid concerns with regard to national security and foreign interests becoming involved and gaining power over national resources. Our own law enforcement and intelligence agencies have been crying foul over this for some time, while our federal government continues to ignore all and hold court with the communist Chinese government.
Canada is the exception. You need to ask yourself, why?
The answers might be found below, as I re-post two, timely posts:
One can’t help but think about the Chinese state connection to the Northern Gateway Pipeline…
Updated: Thanks to Ivana C Justice for this timely news segment from Business News Network, featuring a business person and commentator who has firsthand knowledge of what happens when you sell a company to CNOOC and the Chinese government… and why the Canadian government needs to stop this immediately. This news segment cuts right to the chase of Chinese government policy and why it will never fit in with Canadian business.