Ex-Dow Jones director settles SEC insider trading case

By Martha Graybow and Karey Wutkowski

WASHINGTON (Reuters) - Prominent Asian banker and former Dow Jones board member David Li will pay $8.1 million to settle civil charges of insider trading ahead of a buyout bid from News Corp last year that sent Dow Jones shares soaring.

The U.S. Securities and Exchange Commission on Tuesday also settled insider trading charges with three other Hong Kong residents, including businessman Michael Leung Kai Hung, a close friend of Li, and Leung's daughter and son-in-law. Leung will pay $16.2 million to resolve the case.

All of the defendants settled without admitting or denying the charges.

Li, chairman and CEO of the Bank of East Asia and a member of Hong Kong's Legislative Counsel and Executive Committee, is a well-known businessman in Hong Kong whose links to the trading probe drew headlines in Asia and the United States when the SEC began investigating last year.

Li, 68, learned about the News Corp bid through a telephone call with Dow Jones' general counsel on April 12 and told Leung about it the next day when the two traveled together on a flight to Shanghai, according to an SEC complaint filed in U.S. District Court in Manhattan.

The buyout offer was not made public until May 1.

Shares in Dow Jones closed at $34.36 on April 12 and shot up to close at $56.20 on May 1.

Li was quoted by The Wall Street Journal last May as saying: "I did not disclose to anyone, not even my wife, any information about Dow Jones."