The US Securities and Exchange Commission said 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 SEC and the New York state attorney general have been investigating unusual trading in Dow Jones' stock and options before the buyout offer was announced on May 1.
A civil complaint filed by the SEC in Manhattan federal court said the Hong Kong couple bought 415,000 shares of Dow Jones from April 13 to April 30 "while in possession of material, non-public information" regarding the impending News Corp bid. The SEC did not specify how it believed the couple learned of the impending take-over offer for the Wall Street Journal publisher.
In court documents, the commission said it had "strong circumstantial evidence" that improper trading had occurred, saying that the Dow Jones stock purchases increased the value of the defendants' Merrill Lynch & Co Inc brokerage portfolio by about 25 times and that they had no history of trading that stock in the account previously. Prior to the Dow Jones purchase, the portfolio contained mostly fixed income assets, the SEC said.
A Dow Jones spokeswoman said the company has no knowledge of any connection between the Hong Kong couple and Dow Jones at this time. A News Corp spokesman was not immediately available for comment.