SEC freezes assets of Chinese trader over bets made on Qihoo before talk of delisting

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The SEC has expressed concern about illegal profits exiting the US as a result of unfair trades made in relation to Chinese companies' plans to go private. Photo: AFP

Published: 6:15pm, 24 Jun 2015Updated: 6:45pm, 24 Jun 2015

The US Securities and Exchange Commission has frozen the assets of a trader in mainland China for suspicious activity, a move that could blunt the trend of Chinese companies rushing to delist in the United States.

The SEC said on Tuesday it obtained an emergency court order to freeze the assets of Luo Haijian, who hails from the Guangdong provincial capital of Guangzhou.

In a complaint filed in a federal court in Manhattan, the SEC alleged that Luo made a profit of more than US$1 million after trading in a US brokerage account in advance of a public announcement by New York-listed Qihoo 360 Technology last week that it had received a buyout offer at a significant premium.

A lawyer or spokesperson for Luo could not immediately be identified or contacted.

Qihoo 360, the biggest internet and mobile security software provider in China, received a massive US$9.6 billion offer to go private from a consortium led by its chairman and chief executive Zhou Hongyi.

"The suspicious timing and size of Luo's trades spurred us to move swiftly to freeze his proceeds and ensure that potentially illegal profits cannot be siphoned out of this account beyond a US court’s jurisdiction while our investigation continues," Andrew Calamari, the regional director of the SEC’s New York office, said in a statement.

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