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China's Solution To Trading Irregularities: Arrest Everyone

That' way to go?
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The detention of one of China’s best-known fund managers has become a family affair—with implications for an entire community. In the past 10 days, authorities have gone from detaining Xu Xiang, who runs Shanghai-based Zexi Investment, for alleged insider trading and stock-price manipulation, to freezing stockholdings worth more than $1 billion owned by his parents. Mr. Xu’s detention marked a milestone in Beijing’s far-reaching crackdown on perceived fraud and irregularities in the wake of the summer’s stock-market crash. Authorities have repeatedly railed against short sellers and other traders, alleging “malicious intent” that jeopardizes the country’s financial security. Their targets include senior securities regulatory officials, the head of the nation’s top brokerage, star private-equity traders and a financial journalist. [WSJ]


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