China’s Xi Hits Hard on Crocodiles as Well as Tigers and FliesPosted: February 14, 2017
SCMP says in its report “China slaps record fine, jail term on hedge fund trader amid crackdown on ‘financial crocs’” today, “China’s courts have slapped a record fine and imposed a jail term on the country’s so-called hedge fund king after finding him guilty of insider trading and market manipulation, amid a state-directed campaign to crack down on financial malfeasance and bring ‘financial crocs’ to justice.”
Big moneys’ manipulation of the stock market has caused the market crash in 2015 resulting in serious losses to retail investors.
Xu Xiang, one of the culprits, whose hedge funds has 20 billion yuan assets was fined 11 billion yuan and put in jail for 5 and a half years. His and his two associates’ assets of 9.3 billion yuan have been confiscated by the State.
There is rumor that a Hong Kong tycoon was mysteriously brought to mainland China by suspected Chinese plain cloth police for his part in the speculation that caused the crash.
It seems that Chinese President Xi Jinping will strike hard on not only corrupt officials whether big or small (regarded by him as tigers and flies) but also financial crocodiles that hurt small retail investors. Such crocodiles will be punished even though they are not in China. Whether the Hong Kong tycoon has committed the crime of market manipulation or not, the severe punishment meted out to crocodiles and the rumor about the fate of the Hong Kong tycoon will have shocking deterrence to market manipulation.
Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at http://www.scmp.com/business/money/markets-investing/article/2070420/china-slaps-record-fine-jail-term-hedge-fund-trader