TWO Beijing residents have agreed to pay nearly US$2.77 million to resolve U.S. regulator’s charges that their “remarkably timed” purchase of options in Chinese e-commerce company 58.com Inc. stemmed from insider trading, according to U.S. court papers.

    The proposed settlements between the U.S. Securities and Exchange Commission (SEC) and the Chinese nationals, Xia Xiaoyu and Hu Yanting, were disclosed in the papers filed in U.S. federal court in Manhattan last week.

    Without admitting or denying wrongdoing, Xia agreed to pay nearly US$2.35 million, while Hu agreed to pay US$416,038, the SEC said. The settlement must be approved by U.S. District Judge William Pauley.

    Lawyers for Xia, a man who is a director at China-based investment firm, and Hu, a woman who works for a Chinese airline, did not respond to requests for comment yesterday.

    The SEC alleged that Xia and Hu made more than US$2 million by investing in the call options — essentially bets that the stock would rise — before news broke in April that 58.com agreed to buy a 43.2 percent stake in Ganji.com and that Tencent Holdings Ltd. would invest US$400 million in 58.com.

    The announcement pushed 58.com’s stock price up 34 percent to US$67.87, the highest it had reached since its October 2013 debut on the New York Stock Exchange.

    The SEC called the trading by Xia and Hu “remarkably timed,” while saying both had connections to the Chinese financial industry.

    The SEC said Xia was tied to a network of individuals regularly called on to work on deals such as 58.com Inc.’s and, therefore, may have known people with inside information. (SD-Agencies)