Bloomberg BusinessWeek, Nov 23, 2015 (III)

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Fear Grips China’s Finance Industry.
http://www.bloomberg.com/news/ar ... nted-arrests-probes

Note:
(a) summary underneath the title in print: Arrests and investigations rattle money manager
(b) "GAO Xiqing  高西庆, a former vice chairman of the China Securities Regulatory Commission * * * who later led China’s sovereign wealth fund and now teaches at Beijing-based Tsinghua University."
(c) "Howbuy Investment Management Co 好买财富管理股份有限公司 in September said it stopped providing data on premature fund liquidations because the information was too sensitive. The Shanghai-based fund research firm had previously said almost 1,300 hedge funds closed this year amid the stock rout."
(d) "YAO Gang 姚刚, a vice chairman at the CSRC [China Securities Regulatory Commission 中国证券监督管理委员会], is under investigation for 'alleged serious disciplinary violations,' the Communist Party’s Central Commission for Discipline Inspection said. Known as China’s "King of IPOs," he supervised China’s initial public offerings until earlier this year, when he changed to approve bonds and futures, according to Caixin magazine. He joins two other CSRC officials being investigated, one of whom, ZHANG Yujun 张育军, was formerly the general manager of the Shanghai and Shenzhen stock exchanges."
(e) "The securities regulator carried out unannounced inspections of several Chinese investment firms including Harvest Fund Management 嘉实基金管理有限公司 [moved to Shanghai from Beijing in 2003] earlier this month * * * Police in Shanghai also confiscated computers and froze $1 billion of shares in listed companies connected to Xu Xiang, the manager of Zexi Investment [Management] 上海泽熙投资治理公司 known as 'hedge fund brother No 1 [私募界 '带头大哥' or ‘私募一哥’],' who was arrested Nov 1 on a highway between Shanghai and Ningbo.  Among Xu’s fellow money managers who performed well this year, anxiety has been palpable following his arrest, according to hedge fund manager LU Weidong 卢伟东, chairman of Xinhong Investment 东莞市信宏投资管理有限公司 based in China’s southern city of Dongguan. Lu’s Fuguo No 1 fund 富国一号投资基金 was the best-performer among the 236 Chinese multi-strategy hedge funds from June to August, according to Shenzhen Rongzhi Investment Consultant Co 深圳市融智投资顾问有限责任公司, which tracks the data."

(f)
(i) YAN Hong 严弘, Shanghai-based director of China Hedge Fund Research Center [CHFRC 上海交通大学中国私募证券投资研究中心]
(ii) Hao Hong, chief China strategist 首席策略師 洪灝 at Bocom International Holdings Co [Ltd 交銀國際控股有限公司] in Hong Kong  (where BOCOM stands for Bank of Communications 交通銀行; here I use traditional Chinese, because it is a Honk Kong firm)
(iii) "Others caught up in the probes include executives at trading firms Yishidun International Trading 伊世顿国际贸易有限公司 [based in 江苏省苏州市张家港市] and Huaxin Futures 华鑫期货

(g) We’ve never seen anything like it in the past,” said Fraser Howie, a co-author of “Red Capitalism,” a book on China’s financial system, referring to the scale and scope of the probes. “Without question, it’s unprecedented.”
There have been no shortage of bad practices over the past 20 years, including manipulation and offenses such as insider trading, for the authorities to investigate -- had they chosen to do so, Howie said.  “It begs the question: where were the investigations in past years?”

" 'We’ve never seen anything like it in the past,' said Fraser Howie, a co-author of 'Red Capitalism,' a book on China’s financial system, referring to the scale and scope of the probes. 'Without question, it’s unprecedented.'  There have been no shortage of bad practices over the past 20 years, including manipulation and offenses such as insider trading, for the authorities to investigate -- had they chosen to do so, Howie said.  'It begs the question: where were the investigations in past years?' "

Carl E Walter and Fraser JT Howie, Red Capitalism; The fragile foundation of China's extraordinary rise. Wiley, 2011.
(h) "Trading volume of China’s CSI 300 Index and CSI 500 Index futures have plunged after authorities in early September raised margin requirements, tightened position limits and started a police investigation into bearish bets."

Tracking 300 and 500 stocks traded in the Shanghai and Shenzhen stock exchanges, respectively, the CSI 300 and 500 indices are compiled by the China Securities Index Co, Ltd (hence CSI) 中证指数有限公司 [2005- ; Shanghai; governmental corp].