The case is a reminder of the SEC’s ability to build insider trading cases in seemingly challenging circumstances: the Company is incorporated in the Cayman Islands and headquartered in China, both defendants reside in China, and they conducted their trading through a British Virgin Islands company. Although the Order does not detail how the SEC built its case, geography does not seem to have been a limitation. The fact that the trading occurred in Cheetah Mobile ADSs also did not hinder the SEC, indicating the agency will not hesitate to enforce the insider trading laws in cases involving trading in only ADSs that reference a foreign company’s foreign shares.
‘Enforcement 40’ for 2020
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