New | China cracks down on cunning tactics of insider trading but retail investors remain wary

Xue Rongnian is a renowned investment banker in mainland China who was caught by police in November for insider trading and market manipulation.

A former chief executive of Ping-An Securities, details of his arrest showed the China Securities Regulatory Commission (CSRC) was sending a message to the often-arcane A-share market that it was stepping up in its crackdown on unscrupulous traders in an apparent effort to restore investor confidence in the country’s volatile markets.

The detention of Xue, 50, came after a series of scandals in the market which retail investors holding the bag.

Xinhua said Xue, who is well-connected to senior regulators and powerful securities industry officials, used a raft of tactics to dodge investigations, including lobbying the investigators to halt probes, coercing investigators to give up by sending short messages, and colluding with people involved in the cases to lie to investigators.

Pointing to CSRC officials, Xinhua said Xue made a combined 500 million yuan in illegal profits from inside trading between 2013 and 2014 by using “meticulously planned and covert tactics.”

“The cases involving Xue were extremely serious,” Xinhua cited an unidentified CSRC official as saying. “Given the crime’s severity, the regulator thought they were important cases which are rarely seen in the market.”