SEC charges Chinese technology company Cheetah Mobile executives with insider trading
- The SEC has charged Cheetah Mobile CEO Fu Sheng and former president and chief technology officer Xu Ming with insider trading
- The SEC alleged that the two executives set up a stock trading plan after becoming aware of a significant drop-off in advertising revenues
The US Securities and Exchange Commission (SEC) has charged the chief executive and former president of Chinese technology company Cheetah Mobile with insider trading through the use of stock trading plans.
The SEC said on Wednesday that Cheetah Mobile CEO Fu Sheng and former president and chief technology officer Xu Ming had allegedly set up a trading plan after becoming aware of a significant drop-off in advertising revenues from the company’s largest advertising partner.
Payment for adverts placed in its applications by the advertising partner was one of the largest sources of revenue for Beijing-based Cheetah Mobile in 2015, and accounted for nearly one-third of total revenue in the third quarter of the year, according to the SEC order.
Cheetah Mobile’s revenue from the advertising partner declined around 30 per cent in the first quarter of 2016 from the previous quarter to approximately US$32.7 million, representing around 8 per cent of the company’s first quarter revenues of around US$172.9 million, according to the SEC.
Fu and Xu sold 96,000 of the company’s ADS (American Depositary Shares) in 2016 under the trading plan and avoided losses of around US$203,290 and US$100,127 respectively, according to the SEC.
Cheetah Mobile did not immediately respond to the Post’s request for comment on Wednesday. The company has been listed on the New York Stock Exchange since May of 2014.