HONG KONG—The U.S. Securities and Exchange Commission got a
court order Tuesday to freeze the assets of a China-based trader
for suspicious activity ahead of a $9 billion buyout offer for a
U.S.-listed Chinese Internet company last week.
Haijian Luo, chief executive of a Chinese online company, bought
approximately $700,000 of out-of-the-money call options before last
week's announcement of a buyout offer for Qihoo 360 Technology,
according to a news release from the SEC.
Luo has made more than $1 million from the bets and had
requested his brokerage firm transfer more than half of the
proceeds to a foreign bank account, the regulator said.
"The suspicious timing and size of Luo's trades spurred us to
move swiftly to freeze his proceeds and ensure that potentially
illegal profits cannot be siphoned out of this account beyond a
U.S. court's jurisdiction while our investigation continues," said
Andrew M. Calamari, regional director of the SEC's New York office,
in the release.
The SEC said Luo hadn't traded Qihoo securities in his recently
opened U.S. brokerage account.
Qihoo said last Wednesday it received a buyout offer from a
group that includes its chairman at $77 per American depositary
share. The offer came at a 17% premium to last Tuesday's close and
its shares jumped 6.2 % last Wednesday.
Write to Jacky Wong at Jacky.Wong@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires