Fund manager sacked over the mainland regulator's first probe into insider dealing
JP Morgan's mainland asset management joint venture has fired a senior fund manager who is being investigated by the China Securities Regulatory Commission for insider trading.
The case marks the first time a fund manager has been investigated by the regulator for such misconduct amid the government's efforts to cool the surging market, a move that may put a dent on the image of the fund industry.
'The government should take stronger measures and act more forcefully on this kind of thing because there is a lot of this activity going on,' said Lei Yong, the head of research at Fortune SG Asset Management.
The Shanghai-based venture, China International Fund Management, in which JP Morgan has 49 per cent, said yesterday it had received notice from the regulator that it had begun an investigation into its employee Tang Jian for alleged wrongdoings in irregular investing activities based on insider information.
According to Caijing magazine, Mr Tang bought shares in Shanghai-listed aluminium product maker Xinjiang Joinworld, knowing that the fund management firm would include it in its portfolio. He made a profit of more than 1.5 million yuan, it said.
The venture, which is also partly owned by Shanghai International Trust, said Mr Tang had 'seriously damaged' its reputation, and it was actively co-operating in the investigation. Insider trading is a criminal offence in the mainland.