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A prominent investor and the general manager of China’s biggest stock brokerage have been arrested on insider trading charges, the government said yesterday, in the latest aftershock from a plunge in stock prices last year. Authorities launched an investigation into securities traders after the rout that wiped out about US$5 trillion in stock value.
Xu Xiang, an investment fund manager who was detained on November 2, has been charged with “stock market manipulation and insider trading,” Xinhua news agency said, citing law enforcement agencies in the eastern city of Qingdao. The two-sentence report gave no other details.
The general manager of state-owned Citic Securities Ltd, Cheng Boming, and two other Citic managers were arrested on similar charges, Xinhua said, without elaborating.The market benchmark soared more than 150 percent beginning in late 2014.
Prices hit a peak on June 12 and collapsed after changes in banking regulations fueled suspicions the government might withdraw its support. The benchmark fell more than 30 percent, inflicting heavy losses on novice investors who had bought in near the peak. The downturn triggered complaints politically favored insiders profited at the expense of small investors. The government responded by barring large shareholders from selling and ordering executives to buy back stock in their companies.
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