The chairman of the Bank of East Asia has been told by US watchdogs he may face civil action for alleged breaches of securities laws, the bank says.
The future of Dow Jones now rests with the Bancroft family
The Securities and Exchange Commission (SEC) has contacted David Li amid a probe into potential insider trading of shares in Dow Jones.
The SEC investgation is linked to News Corp's $5bn (£2.5bn) bid for Dow Jones, where Mr Li is a board member.
Mr Li denies wrongdoing, and said he would "defend himself vigorously".
'Broken no laws'
He has been served with a "Wells Notice" indicating that the SEC's enforcement division is considering recommending the agency bring civil enforcement action against him.
The bank said no such action has yet been brought.
"I have broken no laws and deny the apparent allegations being made by the staff of the Commission," Mr Li said.
"If the Commission does commence proceedings against me, I will defend myself vigorously."
Earlier this week the Dow Jones board voted to back a takeover by Rupert Murdoch's News Corporation.
The company, owner of the Wall Street Journal, confirmed it "would be prepared to approve, and recommend to the Dow Jones stockholders" the agreement.
The deal's future now rests with shareholders in the Bancroft family, which holds 64% of the voting stock.
The proposal is expected to be presented to the Bancrofts at a meeting on Thursday.
If the deal goes ahead, the deal could reshape the US media landscape.
The offer represents a 65% premium on Dow Jones' share price at the time the deal was announced.
However, the SEC and the New York State attorney general have been looking into unusual trading in Dow Jones stock and options in the weeks before the company disclosed the $60 per share buyout offer from News Corp on 1 May.