The SEC obtained a court order freezing the assets of 4 Chinese citizens and a Chinese-based entity charged with insider trading in advance of a merger announcement by educational companies based in London and Beijing.  The SEC moved quickly - just 2 weeks after the suspicious trading was discovered - as the alleged perpetrators had already attempted to liquidate or transfer their illicit profits. Detection by the SEC. The 4 individuals - Sha Chen, Song Li, Lili Wang, Zhi Yao - each had U.S.-based brokerage accounts. According to the SEC complaint, they purchased American Depository Shares (ADS) of Beijing-based Global Education and Technology Group in the 2 weeks leading up to a 11/21 public announcement of a planned merger with London-based Pearson plc.   Also charged were All Know Holdings Ltd. and one or more unknown purchasers of Global Education stock. Some of their brokerage accounts had been dormant until they bet heavily on Global Education shares, and some of the purchases made either equaled or exceeded the stated annual income of that trader.  The announcements were made prior to the opening of trading on 11/21, and shares of Global Education jumped 97% that day - from $5.37 to $10.60.  The individuals immediately began selling some of their Global Education shares after the announcement, generating $2.7mn in profits. Trading was done through accounts at Interactive Brokers, Credit Suisse Securities, TradeKing, and Citigroup Global Markets.   [See related story, posted 12/7 in Behind The News] Tipper Identified. The SEC alleges that the a Global Education co-founder and Chairman of the Board apparently tipped Wang and possibly others about the potential acquisition.  Wang then transferred new funds into her previously dormant brokerage account and bought 28,000 Global Education shares.  The others also engaged in similarly suspicious trading in Global Education stock, which was typically thin.  On November 11/18, the last trading day before the acquisition announcement, their purchases accounted for more than 35% of the entire day’s trading volume for the company’s shares, which trade on the NASDAQ. SEC Actions. In addition to the emergency relief, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties. SEC Chicago Regional Office Staff Credits. Investigation, which continues, was conducted by:  Allison Fakhoury, Brian Hoffman, Steven Klawans, Delia Helpingstine, John Kustusch, Felisha Clay, Terri Roberts;  Litigation effort will be led by Benjamin Hanauer, Daniel Hayes.  FINRA assisted in the matter.   [SEC PR 11-253, 12/6/11] For further details, go to:  [SEC Complaint]