Well Advantage Limited, a Hong Kong- based firm controlled by billionaire Zhang Zhi Rong, agreed to pay $14 million to resolve U.S. regulatory claims that it profited from illegal trades before Cnooc Ltd. (883)’s announcement that it would buy Nexen Inc. (NXY)The settlement, which still must be approved by U.S. Judge Richard J. Sullivan in Manhattan, amounts to double the illicit profits Well Advantage is alleged to have made when it stockpiled shares of Nexen based on confidential knowledge of the pending deal, the Securities and Exchange Commission said in a statement yesterday.Enlarge image
Well Advantage’s owner, Zhang, is the controlling shareholder of China Rongsheng Heavy Industries Group Holdings Ltd., a Hong Kong-based company that engages in significant business activities with Cnooc, the SEC said. Photographer: Nelson Ching/BloombergNexen’s stock rose more than 50 percent on July 23 after Cnooc, China’s largest offshore oil and gas explorer, said it would pay $15.1 billion in cash to acquire the Calgary-based company. Well Advantage’s owner, Zhang, is the controlling shareholder of China Rongsheng Heavy Industries Group Holdings Ltd. (1101), a Hong Kong-based company that engages in significant business activities with Cnooc, the SEC said.“The speedy resolution of this case shows the serious consequences that await traders who engage in insider trading,” said Sanjay Wadhwa, deputy head of the SEC’s enforcement unit that polices for market abuse.Well Advantage neither admits nor denies the charges, according to the SEC statement. The agency has sharpened its focus on Chinese companies in recent years.Personal Issue
Alan Brudner, an attorney for Well Advantage, declined to comment. Zhang declined to comment before the approval of the settlement, according to Summer Si from iPR Ogilvy inHong Kong, which handles Zhang’s public relations.http://www.bloomberg.com/news/2012-10-19/hong-kong-firm-to-pay-14-million-to-settle-insider-case.htmlRich Families Cut Back on Buyout Firms for Direct Deals
By Margaret Collins - Oct 18, 2012 12:01 AM ETDaniel Lubin, whose family wealth comes from a maker of diaper-rash cream built by his grandfather and later acquired by Pfizer Inc. (PFE), is taking more control of his fortune.Lubin, 52, chairman of Upsher Asset Management, a so-called single-family office that oversees the assets of his family and three others descended from his grandfather, is shifting capital from outside funds into direct investments. Family offices increased their direct allocations to private companies and real estate last year to an average of 11 percent from 6 percent in 2009, according to a study to be released today by the Wharton Global Family Alliance.Enlarge image
Bill Gates, left, and Michael Dell during the Windows XP introduction in New York in this file photo. Photorgapher: Andrea Renault/Globe Photos/Zuma Press“If you have a third or half of your portfolio where you’re paying 2 and 20, suddenly you’re saying, ‘You know what, these guys are eating up half of my return,’” Lubin said of fees charged by many private equity and hedge funds, traditionally 2 percent of assets and 20 percent of profits. “That doesn’t make any sense. There’s got to be a better way.”Single-family offices are investing directly because of declining fund returns and concerns that some outside managers charge high fees and may have conflicts of interest, according to Wharton. The offices generally are dedicated to the investment oversight and financial planning of one clan. They usually serve families worth at least $100 million, such as those of computer maker Michael Dell and Microsoft Corp. (MSFT) co- founder Bill Gates.http://www.bloomberg.com/news/2012-10-18/rich-families-cut-back-on-buyout-firms-for-direct-deals.html
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