The US Securities and Exchange Commission (SEC) is set to file charges against a board member of Dow Jones in relation to alleged insider trading in the company's shares.

The group is the subject of a $5 billion (£2.4 billion) takeover offer that is being recommended by the Dow Jones board.

Sir David Li, who is also the chairman and chief executive of the Bank of East Asia, has been notified that the SEC is planning to file civil charges against him after the regulator sent the Dow Jones board member a Wells notice, which allows Sir David to make a last appeal to the agency to halt the case, The Wall Street Journal reports today.

Sir David had been called by the SEC to give evidence in an investigation into suspicious trading in Dow Jones just before News Corporation, parent company of The Times and Times Online, went public in May with its bid for the American media group, which owns The Wall Street Journal.

The Journal reports a robust denial by Sir David, who acknowledges that he has received a Wells notice from the SEC.

He is quoted in the Journal as saying: "I have broken no laws and deny the apparent allegations being made by the staff of the commission. If the commission does commence proceedings against me, I will defend myself vigorously.

"In the meantime, I will continue to carry out all my business and public duties while defending my good name and reputation."

The Times reported on June 30 that Sir David had been called by the SEC to give evidence in an investigation into Kan King Wong and his wife, Charlotte Ka On Wong Leung, who allegedly made an $8 million profit from trading on inside information before the News Corp deal was announced.

News Corp's takeover of Dow Jones has been recommended by a majority of its board members, but the Bancroft family, who collectively control 67 per cent of voting shares in the American group, are believed to be split about backing the $60-a-share deal.

The family is expected to meet by Monday.

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