Well Advantage is indirectly wholly-owned by billionaire Zhang Zhi Rong, who is also the controlling shareholder of China Rongsheng Heavy Industries Group Holdings Ltd., a Hong Kong- based company, the SEC said. China Rongsheng does significant business with Cnooc, the SEC said. Profit of Well Advantage, incorporated in the British Virgin Islands, topped $7 million. Other traders still being sued earned millions of dollars more, the SEC said. The regulator didn’t file a complaint against Zhang Zhi Rong.

Beefed-Up

Beefed-up enforcement by U.S. regulators focusing on overseas trading helped detect the suspicious trading, one official said.

“We had a team of people who had looked at it, and we had broker-dealers identifying any trading coming from non-domestic forces,” said Cameron Funkhouser, head of Finra’s office of fraud detection and market intelligence.

“We learned within hours of the announcement that there was suspicious trading coming in from foreign broker-dealers.”

Well Advantage didn’t admit or deny wrongdoing. In the $14.2 million settlement, the company was able to recover another $7 million that the SEC had frozen in its emergency action, according to court records.

Alan Brudner, a Well Advantage lawyer, declined to comment on the settlement.

Lung Drug

The InterMune case involving Esbriet, its lung disease drug, was one of five foreign insider trading cases filed since 2010 in which investors traded through a British Virgin Islands entity.

Sarkesian used the BVI-based entity, Quorne, to buy InterMune options after a source tipped him that the EU’s Committee for Medicinal Products for Human Use would recommend approval of Esbriet in December 2010, according to the SEC.

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