It is alleged that six Chinese citizens and Prestige Trade Investments Ltd. reaped more than $9 million by trading in Zhongpin ahead of an announcement of a proposal to take the company private. The seven defendants bought substantial quantities of common stock and call options in Zhongpin between March 14 and March 26. Zhongpin’s stock price jumped 21.8% on March 27 when the company publicly announced that its Chairman and CEO Xianfu Zhu had made a non-binding offer to acquire all of Zhongpin’s outstanding stock at $13.50 a share, a 46% premium over the previous day’s closing price.
As a result, the SEC has obtained a court-ordered freeze of the assets of six Chinese citizens and one British Virgin Islands entity charged with insider trading in Zhongpin Inc., a China-based pork processor whose shares trade in the U.S.
SEC Freezes Accounts of Six Chinese Citizens and One Offshore Entity Charged with Insider Trading
