Four Chinese citizens have been sued on civil charges of insider trading for allegedly making more than $2.7m in profits by buying shares of Global Education and Technology before the language-testing company announced its takeover by Pearson last month.
The US Securities and Exchange Commission said a US judge froze accounts held by the individuals, a China-based entity controlled by one of them called All Know Holdings, and unknown persons behind trades made by China Everbright, a financial services company.
Some of the trades were unusual because they accounted for high trading volume in Global Education’s American depository shares in the days before its November 21 takeover announcement. The deal sent shares of Global Education up 97 per cent, allowing the individuals and entities to double their money.