updated 1/28/2008 11:26:29 AM ET 2008-01-28T16:26:29

A prominent Hong Kong banker has tentatively agreed with the U.S. securities regulator to pay $8 million to settle an insider trading investigation linked to shares in Dow Jones, a report said Monday.

Details of ongoing negotiations between David Li — one of Hong Kong's wealthiest and most influential men — and the U.S. Securities and Exchange Commission could still change, the Financial Times reported, citing unidentified people familiar with the situation.

Any deal would need approval from the SEC's five commissioners, it said.

Li, chairman and chief executive of Hong Kong-based Bank of East Asia and a former member of the board at Dow Jones & Co, would not admit or deny wrongdoing, the paper reported.

His Hong Kong office at Bank of East Asia declined comment when contacted by The Associated Press on Monday, saying Li was out of town and that they had no information about the settlement.

The paper said the securities regulator had collected circumstantial evidence that potentially links Li to unusual trading by others in Dow Jones stock before Rupert Murdoch's News Corp. announced its plan in May to buy out the media company for $5 billion. The takeover deal was completeed late last year.

Li had denied wrongdoing in July when he was informed by the SEC that it was considering "civil enforcement action" against him for alleged violations of U.S. securities laws.

Two Hong Kong residents, Kan King Wong and Charlotte Ka On Wong Leung, have been charged by the SEC for benefiting from illegal trading in Dow Jones stock. The regulator alleged the couple had made "highly profitable and highly suspicious" trades based on inside information between April 13 and April 30 of 2007.

The lawsuit doesn't explain how the couple allegedly obtained inside information about News Corp.'s offer. Leung's father, Michael Leung, is a Hong Kong businessman who has close business and social ties with Li.

The amount of Li's fine, $8 million, is said to be tied to the size of the couple's profit, the FT quoted people familiar with the matter as saying.

The 68-year-old Li has a seat in the territory's legislature and Cabinet, as well on the boards of dozens of charities and business groups. Business magazine Forbes estimated Li and his family shared a fortune of $1.4 billion.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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