Courts

Accused Inside Trader ‘Shocked’ Hedge-Fund Friend Misled Him Accused insider trader Rupinder Sidhu told U.K. authorities he was shocked to discover a friend who worked as a hedge-fund trader had passed him confidential information. Sidhu, a management consultant from Osterley, West London, thought share tips from AKO Capital LLP trader Anjam Ahmad were based on “research, knowledge and expertise” not inside information, according to a statement he gave to the Financial Services Authority that was read out in court yesterday. “I was shocked to discover what Ahmad had been doing at his work,” Sidhu wrote. “I have not knowingly been involved in any insider-dealing activity.” Ahmad told Sidhu when his firm was about to buy or sell a stock so Sidhu could benefit from the effect of those trades on its share price, Michael Brompton, a lawyer for the FSA said last week. Sidhu, 40, made about 500,000 pounds ($780,500) from spread bets on companies including Julius Baer Group Ltd., Swatch Group AG (UHR) and Michael Page International Plc (MPI) between June and August 2009, according to prosecutors. Sidhu, who pleaded not guilty to 23 counts of insider trading and one money laundering charge in April, is due to be cross-examined today. Canada Goose CanadaInsider trading carries a maximum sentence of seven years. SEC Freezes Assets of Chinese Traders Over Inside Trading Claims The U.S. Securities and Exchange Commission won a court order to freeze assets of four Chinese citizens accused of using non-public information to trade ahead of Pearson Plc (PSON)’s announcement of plans to acquire Beijing-based Global Education & Technology Group Ltd. (GEDU) Sha Chen, Song Li, Lili Wang and Zhi Yao bought American depository shares of Global Education in the two weeks before London-based Pearson, owner of the Financial Times, said on Nov. 21 that it will pay $294 million to acquire all of the Chinese firm’s outstanding stock, the SEC said in a complaint filed at U.S. District Court in Illinois. Wang may have received a tip about the acquisition from Global Education’s co-founder and chairman, who possibly tipped others, according to the SEC. Wang transferred funds into her brokerage account and bought 28,000 Global Education shares, the SEC said. All Know Holdings Limited and other unknown purchasers were also named in the SEC complaint. Some of the defendants had already tried to liquidate or transfer their illicit profits, which totaled $2.7 million, the SEC said in a statement yesterday. In some cases, stock purchases equaled or exceeded the stated annual income of the traders, the agency said. There was no known defense counsel for the defendants, the SEC said. A phone call to Global Education in Beijing outside normal business hours wasn’t answered.