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Insider trader to pay proceeds to charity

AAP logoAAP 17/11/2016 Ethan James

A man who made more than $20,000 from insider trading after tip-offs from a friend nine years ago has been given a good behaviour bond and will repay profits from his activity to charity.

Fei Yu, of Sydney, was slapped with a one-year good behaviour bond, $10,000 fine and ordered to pay more than $17,000 to charity after illegally buying shares in credit referencing agency Veda Advantage Limited in January 2007, the Australian Securities and Investments Commission said.

Mr Yu invested more than $34,000 in Veda shares and contracts for difference after receiving information about a proposed takeover of Veda by Pacific Equity Partners from friend Bo Shi Zhu.

Mr Zhu was an executive in the finance division of a company advising Veda.

The shares, which made a gross profit of $20,567, were held by Mr Yu in an account under his mother's name.

Mr Yu pleaded guilty to one rolled up charge of insider trading and admitted to a second insider trading charge in the NSW District Court.

ASIC said Mr Yu is the third person convicted of insider trading following an investigation into Hanlong Mining Investment, although he has no direct association with the company.

In early 2013, Mr Zhu, Hanlong's former vice-president, was sentenced to two years and three months jail for insider trading with Mr Yu and other offences.

In March, ex-Hanlong managing director Hui Xiao was jailed for more than eight years for insider trading.

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