Police have arrested three suspects allegedly involved in insider trading of shares in Zhejiang Hangxiao Steel Structure, highlighting the securities watchdog's determination to crack down on stock-related crimes.
The suspects included Luo Gaofeng, securities representative of the Shanghai-listed building materials maker who was in charge of market disclosure, China News Agency reported, citing information from the China Securities Regulatory Commission.
Luo was one of five senior managers who received warnings and a fine from the CSRC last month over the improper release of insider information.
Two other men, Wang Xiangdong and Chen Yuxing, were also arrested over the alleged insider trading, the agency reported. It did not provide further details on the suspects such as which companies they worked for. They are both under criminal investigation.
According to mainland media reports in April, police launched an investigation into the owner of a nightclub frequented by the management of Hangxiao, who was suspected of using insider information to trade the stock.
The owner bought shares in the company after learning from a hostess that the managers had bragged they had secured a still unreported overseas construction contract.
CSRC launched a formal investigation into trading irregularities in Hangxiao's shares after the company announced a 34.4 billion yuan building contract for 12 Angolan cities in March that sent the company's shares soaring by as much as sixfold.