Who's Who of Those Swept Up in China's Stock Industry Probes

  • 16 people targeted at finance firms, regulator, elsewhere
  • Investigations come after China's stock rout over the summer

China’s stock market clampdown has seen officials at the securities regulator, senior staff at Citic Securities Co., and a top fund manager among those caught up in investigations. At least 16 people so far have been identified by the official Xinhua News Agency, the government, or their employers as arrested, under investigation or assisting the authorities.

A probe of one of the most senior officials at the China Securities Regulatory Commission, Yao Gang, was announced last week.

Yao Gang
Yao Gang
Photographer: Che Liang/Imaginechina

Bloomberg News hasn’t been able to contact any of these individuals through their firms, the CSRC, or public records to get their responses. Citic Securities has repeatedly declined to comment on the cases of its eight employees named here.

The probes follow a stock boom that turned to bust in June. Here are those identified as being under investigation or assisting the authorities:

Hedge-fund Boss

Xu Xiang is in his late 30s and known as “hedge fund brother No. 1” for his knack of timing swings in stocks and for his top performance among money managers in China. His firm, Zexi Investment, managed four of China’s top-10 performing hedge funds between June and August, when the stock market was in turmoil, according to Shenzhen Rongzhi Investment Consultant Co. Xu was detained on charges including insider trading and stock manipulation, Xinhua reported Nov. 1.

Stock Regulators

Yao Gang, 53: one of four vice chairmen at the securities regulator. He is under investigation for “alleged serious disciplinary violations,” the Communist Party’s discipline committee said in a Nov. 13 statement employing language that often refers to corruption probes. Known as the “King of IPOs,” Yao formerly oversaw approvals for initial public offerings and was currently responsible for supervising bonds and futures, according to Caixin magazine. He played a central role in efforts to quell stock market turmoil, Caixin said.

Zhang Yujun
Zhang Yujun
Photographer: Qilai Shen/Bloomberg

Zhang Yujun, 52: one of three assistant chairmen at the CSRC -- a level below Yao Gang. He is under investigation on suspicion of “severe disciplinary violations,” the Communist Party’s discipline committee said Sept. 16, using language that often refers to corruption probes. Zhang started his career at the CSRC in 1995 and later headed the Shenzhen and Shanghai stock exchanges. Zhang was reassigned back to the CSRC in 2012 and chaired at least two meetings with brokerages in August on efforts to bolster equities.

Liu Shufan: a CSRC staff member, admitted insider trading in two companies last year that generated profits of more than 5 million yuan ($785,000), taking bribes, and forging documents in connection with an apartment purchase, Xinhua reported Aug. 31.

Citic Securities

Cheng Boming: president of Citic Securities. He joined the company in 2001 and is a member of its executive committee. He has a PhD in economics from a university in Shaanxi province. Cheng is being investigated for alleged insider trading and leaking inside information, Xinhua reported Sept. 15, citing police.

Xu Gang
Xu Gang
Photographer: Hu Qing/Imaginechina

Xu Gang: managing director of Citic Securities. Xu joined the company in 1998, has been in charge of its stockbroking business and is a member of the firm’s executive committee. He has a PhD in economics. Xu is among four individuals who have confessed to alleged insider trading, Xinhua reported Aug. 31.

Yu Xinli: in charge of Citic Securities’ operations management, which is part of Citic’s stockbroking business, according to a company annual report. Yu is being investigated for alleged insider trading and leaking inside information, Xinhua reported Sept. 15, citing police.

Wang Jinling: vice manager of Citic Securities’ information technology center, which has a direct reporting line to the executive committee, a company annual report said. Wang is being investigated for alleged insider trading and leaking inside information, Xinhua reported Sept. 15, citing police.

Liu Wei: managing director of Citic Securities and a member of the firm’s executive committee. He joined the company in 1997 and runs the company’s capital intermediary business. He has a law degree from China University of Political Science and Law, the nation’s top law school. Liu is among four individuals who have confessed to alleged insider trading, Xinhua reported Aug. 31.

Fang Qingli: head of the “financial business” at Citic Securities, according to Xinhua. He joined Citic Securities in 1997. He was tasked with setting up Citic Securities’ prime brokerage business in 2010, according to an interview with Caixin magazine in 2014. Fang is among four individuals who have confessed to alleged insider trading, Xinhua reported Aug. 31.

Chen Rongjie: head of alternative investments at Citic Securities. Alternative investment is one of six businesses under Citic’s trading operation, according to a company annual report. Xu is among four individuals who have confessed to alleged insider trading, Xinhua reported Aug. 31.

Ge Xiaobo: chief global financial officer for Citic Securities and a member of the firm’s executive committee, according to the company’s website. He is absent from the firm -- “assisting with investigations” -- and unable to perform his duties normally, the brokerage said in a statement to Hong Kong’s stock exchange on Oct. 29, without giving more details. Ge joined Citic Securities in 1997, according to the company’s website.

Business Journalist

Wang Xiaolu: a journalist for business magazine Caijing. He admitted wrongly reporting on July 20 that the CSRC was studying an exit from stock-market support measures, causing panic and confusion, Xinhua reported. In the past two years, Wang had interviewed big names in the securities industry including the CSRC’s Zhang Yujun and Citic Securities’ Cheng Boming.

Futures Traders

Gao Yan, 34: general manager of Yishidun International Trading. She was arrested for allegedly manipulating stock futures trades, Xinhua reported on Nov. 1, citing the police. The company, founded in 2012 in Jiangsu province, used software developed by a foreign national and a “foreign technical team” for high-frequency trading, the news agency said. The firm’s net profit was more than 500 million yuan from early June through July, Xinhua said, adding that the company made a total of 2 billion yuan in illegal profit, without specifying a time period. Gao organized for some profits to be transferred abroad, the news agency said.

Liang Zezhong: business development manager of Yishidun International Trading, arrested for allegedly manipulating futures trades, Xinhua reported on Nov. 1, citing the police. The company, founded in 2012 in Jiangsu province, used software developed by a foreign national and a “foreign technical team” for high-frequency trading, the news agency said. The firm’s net profit was more than 500 million yuan from early June through July, Xinhua said, adding that the company made a total of 2 billion yuan in illegal profit, without specifying a time period.

Jin Wenxian, 47: technical director of Huaxin Futures, arrested for allegedly manipulating futures trades in the case involving Yishidun International Trading, Xinhua reported on Nov. 1, citing the police. Jin, originally from Zhejiang province, hid the number of futures accounts held by Yishidun when liaising with futures brokers and the financial futures exchange, and let Yishidun use his bank account to move funds, the news agency said. Jin also helped Yishidun use the trading software, Xinhua said, adding that he obtained more than 1 million yuan in fees.

— With assistance by Alfred Liu, and Aipeng Soo

Before it's here, it's on the Bloomberg Terminal. LEARN MORE