http://www.nytimes.com/2015/11/03/business/international/xu-xiang-zexi-insider-trading-arrest-china.html?ref=international&_r=0
The billionaire owner of one of the country’s most successful investment firms has become the latest victim of China’s crackdown on corruption in the financial industry, arrested on charges of insider trading.
The arrest on Sunday of the fund manager, Xu Xiang, nicknamed Big Xu, followed what could easily have been an American story line. Mr. Xu and his relatives have a combined fortune of $2.2 billion, according to the Shanghai-based Hurun Report, which tracks the wealth of China’s richest people.
Separately, the police in Shanghai arrested three people in relation to an investigation into a high-frequency trading firm suspected of manipulating futures trades to make a profit of more than 2 billion renminbi, or $316 million, according to a Xinhua report.
7 comments:
As we have learned, East Asian economies tend to have had pretty lenient laws and don't manage insider trading very well. I think that this shows the evolution of the Chinese markets as they are trying to make it a more secure market. Good for the Chinese for cracking down.
It's a good thing that the Asian government is making it harder for corruption. Thankfully "The Chinese government has been extending its anti-corruption investigation, moving more aggressively into the financial industry" which will definitely benefit the economy. The impact that large industries have can be detrimental to the economy therefore it is a good thing that China is stepping forth, and disciplining the guilty.
This is a really interesting story. This seems more common in the United States, because regulation is quite lax in some areas. An interesting aspect to this story is that "an official at the main stock market overseer confessed in late August to insider trading, forgery and accepting bribes." A warning sign of Mr. Xu's activities should have been during the market decline within the past few months. The article says Mr. Xu's investments didn't suffer during the slump, while many others did.
It seems like the Chinese government is taking this very seriously, as they should. I'm curious to see what type of punishment they choose to enact, or if there will be some sort of a trial.
I agree in that it is interesting to see how Asian economies have developed and involved over time in terms of government transparency and trust. Perhaps a decade ago, Mr. Xu's activities would be overlooked and the corruption would continue to permeate the market. It is an encouraging sign to see that the government is taking the issue seriously and going to every measure possible to ensure the problem is taken care of. Also, in regards to Emily's comment, it is a good sign to know that an official involved in the activities confessed in engaging in insider trading, etc. This demonstrates that perhaps the economy has further evolved into one that is trying to hire individuals of higher integrity.
I think especially for future investment in China and the growth of products through innovation is heavily influenced by corruption within a country. By eliminating or at least lessening the worry that products will be exposed to corruption in China should increase the amount of investment and technological innovation in the country. This will thus stimulate the economy and increase growth with increased investment and innovation in China.
This is definitely a good news for the Chinese economy and the country overall. Not only will it make corruption harder among the officials, it will also serve as an example for other neighboring countries. Corruption is a big deal and it is hard to avoid in the East Asian economies. It is time that the other Asian powerhouses come up with similar measures to stop such illegal tradings and attract foreign investments which would help the respective countries overall in the long run.
I agree that this is a very good news to China, hopefully this kind of illegal trading can be reduced in the future, but China does have a long way to go to really stop this kind of illegal tradings.
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