Tiger Asia Management LLC, the New York-based hedge fund run by Bill Hwang, pleaded guilty to a wire fraud charge and will forfeit $16.3 million in a U.S. insider-trading case.

Hwang entered the plea today in federal court in Newark, New Jersey, admitting Tiger Asia agreed to be “brought over the wall” in a scheme to get material, nonpublic information about Bank of China Ltd. shares in December 2008 and January 2009.

“It appears that the gist of the scheme was to use that nonpublic information in order to sell shares in short sales,” U.S. District Judge Stanley Chesler said at the plea hearing. Chesler placed Tiger Asia on probation for one year, and said the $16.3 million represents the total illicit gain.

“Tiger Asia regrets the actions for which it accepts responsibility today and is grateful that this matter is now resolved and behind it in the U.S.,” Hwang said in a statement.

The plea was “negotiated at length,” Tiger Asia attorney Lawrence Lustberg told Chesler, saying the entire amount was paid today. “It reflects a just resolution of this matter.”

Tiger Asia will separately resolve a U.S. Securities and Exchange Commission lawsuit, Lustberg said in an interview, adding that all investor capital has been returned.

In August, the hedge fund said it was returning outside capital to investors amid a three-year probe by Hong Kong regulators. The fund, founded in January 2001, had produced annual returns averaging 16 percent since inception.

Denied Allegations

Hong Kong’s Securities and Futures Commission alleged the hedge fund traded on inside information from bankers arranging placements of China Construction Bank Corp. and Bank of China Ltd. shares in 2008 and 2009, pocketing HK$38.5 million ($5 million). Tiger Asia, which has no employees and physical presence in Hong Kong, denied the allegations in an Oct. 12, 2010, letter to investors.

The firm told clients later that month that it had received a subpoena from the U.S. Securities and Exchange Commission following the allegations by the Hong Kong regulator.

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