The U.S. Securities and Exchange Commission (SEC) said on Thursday that a Hong Kong-based firm charged with insider trading has agreed to settle the case by paying more than 14 million U.S. dollars. The proposed settlement is subject to the approval of the District Court of New York.

The SEC said in a statement that the Hong Kong-based firm Well Advantage "has agreed to the entry of a final judgment requiring payment of 7,122,633.52 dollars in illegal profits made from trading Nexen stock, and payment of a 7,122,633.52 dollar penalty. "

The SEC alleged in a July complaint that Well Advantage stockpiled shares of Nexen based on confidential information that China National Offshore Oil Corporation (CNOOC) was about to announced an acquisition of Nexen, a Canadian oil company.

CNOOC and Nexen announced before the markets opened on July 23 that CNOOC agreed to acquire Nexen for about 15.1 billion dollars. Nexen's stock subsequently rose sharply compared with the closing price of the previous trading day.

Well Advantage sold those shares for more than 7 million dollars in "illicit profits" immediately after the deal was publicly announced, said the SEC.

The SEC filed an emergency action against Well Advantage to freeze its assets less than 24 hours after the firm placed an order to liquidate its entire position in Nexen.

"If approved by the court, Well Advantage has agreed to give up all of its ill-gotten profits from these trades and pay a substantial penalty on top of that," said Sanjay Wadhwa, Deputy Chief of the SEC Enforcement Division's Market Abuse Unit.

Well Advantage neither admits nor denies the charges, the statement noted.