China Loses All Control: Arrests Journalist, Financial Executive Over Market Crash

Tyler Durden's picture

For two months, China has been on a quest to control both the stock market itself and the narrative around the stock market. 

After an unwind in the CNY1 trillion back alley margin lending complex sparked a late June selloff, China cobbled together a plunge protection team run by China Securities Finance (an arm of CSRC) and began intervening in the market.

That effort has cost an estimated CNY900 billion so far.

On July 20, Caijing magazine suggested that CSF was setting up to scale back the market interventions which many believed had kept the SHCOMP from collapsing altogether. Here's what happened next:

That suggestion caused futures to slide in China and in short order, the "rumor" was denied by CSRC. Now, the reporter who penned that story has been arrested for, as Bloomberg put it earlier today, "spreading fake stock and futures trading information."

This comes on the heels of a move by Beijing earlier this week to suppress discussion of Monday's market rout, which, along with the selloffs it triggered in bourses across the globe, was dubbed "Black Monday."

Of course this isn't the first time - and it probably won't be the last - that China has cracked down on the media for "subversive" coverage of financial markets. Early last month, Beijing reportedly banned the use of the phrases "equity disaster" and "rescue the market." That said, throwing reporters in jail marks a new escalation in the war on financial reporters, or, as the managing editor of The South China Morning Post put it, "you already know it's risky to be political journalists in China - Now financial reporter is risky job too."

But reporters weren’t the only ones getting arrested in China overnight in connection with the country’s stock market collapse. As we tipped on Tuesday evening, China has also arrested CITIC Securities Managing Director Xu Gang.

Here’s his profile, via Bloomberg:

Mr. Gang Xu serves as the Managing Director at CITIC Securities Company Limited. Mr. XU serves as Chairman of the brokerage development at CITIC Securities Co., and head of the research department with responsibility for brokerage business as well as research. Mr. Xu joined CITIC Group in 1998 and served as Senior Manager, Deputy General Manager and Executive Director in departments such as the asset management department, the financial products development team, the research department and the equity sales and trading department. Mr. Xu serves as Vice Chairman of Analysis Commission of SAC. Mr. Xu serves as Director of CITIC Wantong Securities Co., Ltd. He holds a Bachelor's Degree in Planned Economics in 1991 from Renmin University of China, a Master's Degree in Economics in 1996, and a Ph.D. in Political Economics in 2000 from Nankai University.

 


And some context on CITIC's market share:

 


Details around the arrest are sparse, with Caixain saying only that the investigation revolves around "illegal trading," and indeed, it's certainly possible that Beijing is simply out to send a message by arresting a high profile investment banker for no reason at all. 

That said, it's worth noting that earlier this month, CITIC suspended its short selling business in an effort to "comply with urgent changes in exchange rules." 

So perhaps Mr. Gang Xu failed to fully "comply", in the process becoming no better than a sinister foreign short-selling speculator.

Or perhaps it's much simpler than that. Perhaps he just sold something.

And while US regulators aren't big on throwing powerful bankers in jail, when it comes to censoring the media for spreading "false information" about markets and those who control them, America isn't much better than China:

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Last of the Middle Class's picture

some one has to pay!!! SSDD. And it damn sure won't be the ones rigging the market.

Silky Johnson's picture

So they arrested a Chinese Jew, why am I supposed to care? I hope he gets the bamboo in the peehole treatment.

VinceFostersGhost's picture

 

 

Chinese Jew

 

Ummmm.....nevermind.

StackShinyStuff's picture

CITIC in China is NOT like Goldman in US.  They are just a bunch of pikers.

 

Edit:  Is that really how you pronounce "Xu"

tc06rtw's picture

Them Communists sure get bitchy when they’re forced to take a loss!
 
  (and they’re only patient when it’s in their favor)

post turtle saver's picture

they're fucking paper tigers when it's all said and done... you can copy the US but you can't *be* the US...

V in PA's picture

Fuck Yeah!!! Murica, has the best damn money changers outside of London. You've been setup ChinkTown. Let the financial raping of China begin.

 

Just in case... /s

El Oregonian's picture

EXECUTIONS WILL CONTINUE UNTIL THIS STOCK MARKET IMPROVES.

Usurious's picture

the jews have infected/infested every country in the world.........

Jews and Judaism in China have had a long history. Jewish settlers are documented in China as early as the 7th or 8th century CE. Relatively isolated communities developed through the Tang and Song Dynasties (7th to 12th centuries CE) all the way through the Qing Dynasty (19th century), most notably in the Kaifeng Jews (the term "Chinese Jews" is often used in a restricted sense to refer to these communities). By the time of the establishment of the People's Republic of China in 1949, few if any native Chinese Jews were known to have maintained the practice of their religion and culture .[citation needed] In the late 20th and early 21st centuries, however, some international Jewish groups have helped Chinese Jews rediscover their heritage .[citation needed]

https://en.wikipedia.org/wiki/History_of_the_Jews_in_China

MSimon's picture

It is critically important to eliminate the Einstein, Bohr, Feynman infection.

 

No more Jewish science!

 

Denounce the photoelectric effect!

BlussMann's picture

"In the late 20th and early 21st centuries, however, some international Jewish groups have helped Chinese Jews rediscover their heritage .[citation needed]"

Citation needed indeed. The Kikes are creating a bogus class of Gook Jews to inflitrate Chinese society and corrupt it the way they have done with the West. My take on the Chinese is that race is so supremely selfish they can be easily bought. Not to say the the West wasn't also corrupt, but the Chinese take greed to a whole new level - easy pickings for the "oven dodgers".

TruthHunter's picture

Truth is Stranger

The Jews ARE everywhere. So are the Jew baiters. Even here.

 

https://en.wikipedia.org/wiki/Kaifeng_Jews

Bangin7GramRocks's picture

Can we arrest Cramer?

silver_stacker's picture

Can we arrest Cramer?

Probalby not but we should hang him by his nutsack!

Anglo Hondo's picture

Can we arrest Cramer?

No. As far as I know, crass stupidity is still not a crime in Murika.  Just too many to jail.

Montani Semper Liberi's picture

 Being complicit in market manipulation, as in relaying "COOKed" inside information to the algos, is viewed as a crime by the SEC. 

 Oh.....wait.

J Jason Djfmam's picture

Crass stupidity is a requirement.

Blankenstein's picture

He should have been arrested a long time ago.

 

Cramer admits market manipulation:

https://www.youtube.com/watch?v=gMShFx5rThI

JustObserving's picture
Arrests Journalist

Could they simply not have hacked his Mercedes like they are wont to do in the land of the free?

Michael Hastings Car Hacked and Remotely Driven into a Tree to Murder Him?

https://www.youtube.com/watch?v=qQrHnP9lXIU

Gary Webb who reported on cocaine crack sales by the CIA in California to raise money for the Contras apparently committed suicide by shooting himself twice in the head.

It would be more effective to arrest all employees of Citadel that had been shorting Chinese stocks before Citadel was banned from trading

 

Citadel Barred From Trading In China After Regulator Accuses "Automated Trading" Unit Of Manipulation

http://www.zerohedge.com/news/2015-08-02/citadel-unit-barred-trading-chi...

dimwitted economist's picture

Ruh roh is right! Fuck! you no sell stock moffer fuckers!!!

JimmyRainbow's picture

BURN DEM ALL DA WRONG TALLYMEN

in favur of stump rupture of parts of their bode with heavyachinery.

 

and afterwrds sit with a beer and mumur to aself:

we cterpillared some folks......

Tall Tom's picture

 

 

 

 

And when you lose control,

You'll reap the harvest you have sown.
 

And as the fear grows,

The bad blood slows and turns to stone.
 

And it's too late to lose the weight you used to need to throw 
around.
 

So have a good drown, as you go down, all alone,
 

Dragged down by the stone.

 

Pink Floyd

Doubleguns's picture

And while US regulators aren't big on throwing powerful bankers in jail, when it comes to censoring the media for spreading "false information" about markets and those who control them, America isn't much better than China:

 

Bullsit, Cramer and Corzine still run free. 

taketheredpill's picture

Citic in China is like Goldman on Wall St. Can u imagine if NYPD arrested a top banker from Goldman's NY office?

 

And another pair of pants ruined...

Arnold's picture

Set of shorts ruined.............

Time to break out the white shoes again, for the final fling.

 

http://womens-fashion.lovetoknow.com/Why_Is_It_Bad_to_Wear_White_After_L...

 

Another tradition ruined by Yutes.

MSimon's picture

I think the shorts are going to jail.

moskov's picture

And Dominique Strauss-Kahn, Julien Assange and Snowdon are not scapegoats because they all have the fetish of raping ugly women...

youngman's picture

Probably some Communist party members order was not sold in time...and he lost money....so arrest the bastard...that will show hime to lose your familys money

buzzsaw99's picture

in usa you don't arrest squid, squid arrests YOU

MSimon's picture

Might as well jump.

CheapBastard's picture

"To jump or not to jump, that is the question."

 

~ Modern Shakespeare

earlyfrick's picture

With the majority of the chinese citizen investing in the stock market, yes these people should be arrested for spreading false news in media

Downtoolong's picture

Can u imagine if NYPD arrested a top banker from Goldman's NY office?

Imagine it, I dream about it every night!

Chuck Knoblauch's picture

Stupid headline.

China us a communist discatorship.

The government is the market.

The market is the government.

 

Smegley Wanxalot's picture

The word is "discotatorship."  Beijing commies have shit musical taste.

deerhunter's picture

it may take years but scum always rises to the top,  it is natures way.  Ever seen beer brew?  The scum will be exposed to light here in USA.  Look around and open your eyes.  I am not tech savvy however the internet is the greatest way to help bring light to the scum.  Light.  Natures disinfectant.  A cop i know,  not a friend just someone who patrols the neighborhood was chatting to me at a neighborhood coffee shop.  I was talking about the high price of ammo over the last few years.  He said he hasnt paid for handgun ammo since he became a cop.  So I asked him if he meant he was stealing it from the practice range.  He said no need to steal it is handed out freely.  So I asked him if I could get in line when the "free" ammo was being handed out.  The conversation ended there as he had a call to run.  He doesnt even look at me in the coffee shop any more if he sees me.

The corruption in our country is every where.  It is on all levels of business,  government,  education and religions.  If you lie down with dogs you get fleas.  Our nation is no longer a nation set on a hill.  A light in a dark world,, blah blah blah.  It is and has been every man for himself for many decades.  For God sake,,, there is a Self magazine at the checkout line.  How much more self centered could you become than to buy a magazine with the title of Self?   Look around people.  Consequences for chasing  "Almighty Dollar."  Those consequences are becoming more and more clear now.  Light shining into a dark place.

In the last days men will call good evil and evil good.   Always keep one eye on your bobber,  out for now.  Have a great day.

Shad_ow's picture

Well said.  So sad.  But true.

Ban KKiller's picture

"Good cop" story? Ummm....nope! Just another pig in the trough. No doubt he does not consider himself a free loader. Pun intended. 

Banks particularly hate the light of truth. Shrinks their dicks. 

Smegley Wanxalot's picture

Fook yooo maricious serrers!

buzzsaw99's picture

the market is down. arrest sum dum fuk.

Mike Honcho's picture

You got Madoffed.

user2011's picture

Revolution is coming....    Communism protect dumbshit lucky baster.     But darwan theory still works in the long run.    Now,  these lucky corrupting officials has driven China to the edge of extinction.   Revolution will come soon.    After China goes down, next is N. Korea.

Communism and islam are two worst things human ever invented.

SMC's picture

Investigating, arresting, prosecuting, and jailing or executing those who are guilty of pushing misleading information and manipulating markets appears to be a country "in control".

Too bad it does not happen in western countries.

q99x2's picture

Issue the arrest warrants for Jamie Dimon and Lloyd Blankfein. They are two main reasons for the Chinese stock market crash. The banksters have declared war on India, Russia, Brazil and China. Arrest them.