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by Mike Caswell

Luis Chang, the man charged for selling millions of shares of Allied Nevada Gold Corp. after announcing a bogus takeover bid, has agreed to pay $5.8-million to settle the case. (All figures are in U.S. dollars.) He has also agreed to a permanent injunction against making any takeovers that he does not intend to complete. Mr. Chang did not admit any wrongdoing in agreeing to the penalties.

The sanctions for Mr. Chang come as part of a civil case the U.S. Securities and Exchange Commission filed against him over a $7.50-a-share takeover offer for Allied Nevada. The deal, which purportedly came from a $15-billion Chinese company, was a substantial premium to Allied Nevada's then-previous close of $4.31. It sent the stock to around $5 before serious doubts emerged about the authenticity of the bid. Meanwhile, Mr. Chang sold $7-million worth of stock, according to the SEC.

Mr. Chang denied any wrongdoing, but has now agreed to settle the case out of court. His penalties, as detailed in a May 15, 2015, judgment, include disgorgement of $2.89-million in gains plus a civil penalty in the same amount. With interest, he must pay $5.8-million. He has also agreed to an injunction barring any future violations, particularly those involving a takeover bid. The terms include a ban on making any announcement of a takeover bid with the intention of manipulating the price of a stock.

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