Former Sina Corp co-chairman Daniel Chiang and his wife Eva Chen have been fined for insider trading, according to the US Securities and Exchange Commission.
Mr Chiang used an account held by his wife, the chief executive of Tokyo-based antivirus firm Trend Micro, to short sell Sina stock in 2005, three days after learning that the company would publish revenue forecasts below investor expectations.
Short selling is a way of profiting from a decline in the price of a stock by selling shares one does not own in the hope of buying them back at a lower price. The gains are made from the difference in the selling and buying prices.
Shares of Nasdaq-listed Sina, the mainland's largest online portal, fell 26 per cent after the firm's revenue forecasts, helping Mr Chiang reap a US$257,800 profit, the SEC said.
Mr Chiang would forfeit US$515,700 in profit and fines for making the trades and Ms Chen would pay a US$127,900 penalty for helping him, the regulator said.
Ms Chen and Mr Chiang neither admitted nor denied the SEC's allegations when they agreed to settle the case, according to Bloomberg.