The U.S. Securities and Exchange Commission plans to file civil charges against Dow Jones board member David Li over an insider trading probe linked to News Corp.'s bid for the media company, the Wall Street Journal reported on Wednesday.
Citing people familiar with the matter, the Journal reported the SEC has issued a Wells notice to Li, one of Hong Kong's most prominent businessmen. A Wells notice would be the last step before the SEC files suit against him.
The SEC had no comment on the Li report. Representatives for Dow Jones, which owns the Journal, and Li were not immediately available to comment.
Li is chairman and chief executive of Bank of East Asia, a mid-tier Hong Kong lender. He is also a member of Hong Kong's Legislative Council.
The report came a day after Dow Jones' board endorsed a $5 billion buyout offer from Rupert Murdoch's News Corp., sending the deal to Dow Jones' controlling Bancroft family for final approval.
The SEC and the New York State attorney general have been looking into unusual trading in Dow Jones stock and options in the weeks before the company disclosed the $60-per-share buyout offer from News Corp. on May 1.
The SEC said on May 8 that a Hong Kong-based couple, Kan King Wong and Charlotte Ka On Wong Leung, "engaged in widespread and unlawful trading activity" that put them in a position to make an estimated $8.1 million profit on Dow Jones shares.
The Wall Street Journal reported in May that the SEC was expected to pursue a connection between the couple and Li. The paper said Li and Charlotte Leung's father, Michael Leung, share a history of business and social dealings. Michael Leung has not been charged in the case.
Li has denied disclosing information about the bid. In a Wall Street Journal report in May, he said: "I did not disclose to anyone, not even my wife, any information about Dow Jones."
Dow Jones also said in May it was not investigating Li.
Li was born in London in March, 1939, to one of Hong Kong's most prominent families. His grandfather founded Bank of East Asia in 1918, and the company now boasts one of the biggest branch networks in mainland China among Hong Kong lenders.