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Head Of China's 'Goldman Sachs' Probed For Insider Trading As "Market Purification" Continues

Tyler Durden's picture




 

Imagine for a moment the sentiment shock for mainstream Americans if Goldman Sachs' Lloyd Blankfein was probed for insider-trading and publicly scapegoated for causing a nation's equity market (and economy) to collapse. While it may be true, it would never happen in America... But in China, as part of what authorities call "purifying the markets," the president of China’s biggest brokerage has been swept up in a widening campaign to root out financial wrongdoing and assign blame for the nation’s $5 trillion stock rout. As Bloomberg notes, shares are falling further in today's markets as the probe of Citic Securities President Cheng Boming comes after the state-run Xinhua News Agency reported last month that four executives at Citic had admitted to so-called insider trading.

 

 

As Bloomberg reports,

Since the market crash, China’s targets have ranged from so-called “malicious” short sellers to a journalist from business magazine Caijing whose report was alleged to have caused market panic. Authorities say they want to “purify” the market.

 

“There does seem to be a bit of a witch hunt for a scapegoat at the moment, but I think this is mostly signaling by the authorities that they will not tolerate what they perceive as ‘unhelpful’ selling in the market,” Tony Hann, a London-based money manager at Blackfriars Asset Management, which oversees about $350 million, said in an e-mail.

 

Citic confirmed the police investigation of Cheng in a statement to Shanghai’s stock exchange. A brokerage spokeswoman declined to comment further.

 

 

...

 

“The rumor of this investigation had already been on the streets for some time,” said Castor Pang, the head of research at Core-Pacific Yamaichi Hong Kong, referring to the Cheng probe. “The central government may use this case to accelerate its probe into insider trading and tighten regulation further.”

*  *  *

Citic shares are hitting fresh 11-month lows...

 

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Wed, 09/16/2015 - 00:19 | 6554025 q99x2
q99x2's picture

Hang that bastard and issue the arrest warrants for Lloyd Blankfein and Jamie Dimon.

Wed, 09/16/2015 - 01:02 | 6554071 zeropain
zeropain's picture

Moral hazzard on the rise If china cleans house first then they may be in better shape to gain popularity for their yuan as researve currency.  Only the US may be forced into higher interest rate just to compete. Stock may need a haircut to fund teasuries as well.

Wed, 09/16/2015 - 01:02 | 6554083 Bastiat
Bastiat's picture

This is war!  You just don't do this to a Squid executive! Buy

Wed, 09/16/2015 - 01:07 | 6554089 Manthong
Manthong's picture

If we could get 20 or 30 thousand Type 1 Hazmat operators to attend to New York, London, Basel and Frankfurt, we might be able to purify our markets, too.

 

Wed, 09/16/2015 - 01:36 | 6554122 wee-weed up
wee-weed up's picture

He'll probably get a bullet to the back of the head...

If only we had the courage to do the same to Blankfein and his ilk.

Wed, 09/16/2015 - 03:01 | 6554181 fudge
fudge's picture

sounds like this   https://www.youtube.com/watch?v=Yq3N46ciKJw  :D:D:D:D

 

Wed, 09/16/2015 - 02:06 | 6554145 uhland62
uhland62's picture

Why would you want to purify markets? You are trying to snatch away people's competitive edge and really, you shouldn't follw in the commies' footsteps.

Wed, 09/16/2015 - 02:01 | 6554143 uhland62
uhland62's picture

Higher US interest rates are said to cause the mega-crash that everyone fears, because it'll make 1929 look like a picknick. It's the debt burden of countries, they say; there will be many more Greeces and Ukraine. I would not have believed that years ago but do now. The wars and refugees cost and the people can't be left to starve on the sidewalk, schools must still operate etc. Expenses can be influenced only a little. We are in for a wild ride unless the non-productive expenses for warfare can be cut and even then, it might not be enough. I'm warming to China; it is a good way to go.

Wed, 09/16/2015 - 03:03 | 6554182 OldPhart
OldPhart's picture

My mortgage to Citimortgage os gone.  They no longer have any leverage on me.

I'm looking forward to the wave of, soon to be, assassinations of Citibanksters on public streets in every town across the US.

These thieves should hang, slowly, with piano wire, one inch above the dirt, after a slow hoist.

[I wish that fate on everyone in goobermint.]

Still need about a thousand or so gallons of water.  Working on it.

Wed, 09/16/2015 - 00:47 | 6554053 franciscopendergrass
franciscopendergrass's picture

Terms like  "market purification" scare me because they are euphemism created by government and ring of a tone like ethnic cleansing, enhanced interrogation techniques, smart bombs, etc.  Those terms usually result in greater nefarious actions by governmemts and  far worse than they intended.

Hoepfully, this does as it is intended (to run interference on the vampire squid) and not as a mechanism to extort bribes from Goldman.  This would be unlike our Justice Department who hands down fines to extort the corrupt companies.  Justice Department . . . another government euphemism.   They should be called the Department of Thuggery.

Wed, 09/16/2015 - 00:44 | 6554056 starman
starman's picture

insider what? trading? never heard of him. sorry.

Wed, 09/16/2015 - 01:04 | 6554082 AbbeBrel
AbbeBrel's picture

ALERT: allegedly bourgeois traders have infiltrated the markets and society at large!! The Red Guard (the color in China for an "up" market) will enforce the doctrine of "Up and To The Right" by purging evil speculators and sellers. Evil western economic policies will not be tolerated in the Great Leap Upward!

Irony off - if you want more background in the current tough-ass anti-western regime now in China - this Jim Chanos talk is a must-listen for ZH'ers. Instead of a Great Leap Forward it looks like more of a nationalistic Large Step Backward coming up:

https://soundcloud.com/robenfarzad/chanos-on-china

Wed, 09/16/2015 - 03:06 | 6554183 OldPhart
OldPhart's picture

It won't be a 'large step backwards'

It will be a retreat, an actual rout.

Wed, 09/16/2015 - 01:14 | 6554094 CheapBastard
CheapBastard's picture

I have read insider trading there is rampant. That's one reason no one trusts their stawk market. If Jingping can control that, perhaps investors will return but that's a big if.

 

However, if they hang 8 GS corrupt bankers, people will feel alot more confident since "8" is a lucky number in China from what I've heard.

Wed, 09/16/2015 - 01:30 | 6554120 HowSad-Never Mind.
HowSad-Never Mind.'s picture

I have read that members of the US Congress are allowed to do insider-trading legally and that it happens all the while on Wall Str and at the Fed, with ZERO attempt to stop it.

 

In short: there is an endemic culture of corruption ... and not forgetting London, Frankfurt and Brussels.

 

At least Beijing and Moscow seem to be trying to rein-in the "greed is good" sociopaths who comprize about 6% of any population and who rise like scum on a cess-pit, unless sunk by people of principle.   

Wed, 09/16/2015 - 01:12 | 6554097 nyse
nyse's picture

Well, I'm shocked.

Wed, 09/16/2015 - 01:30 | 6554117 netpounder
netpounder's picture

All roads to financial ruin lead to Goldman.  Follow the yellow brick (gold) road to find the ()man behind the courtain.

Wed, 09/16/2015 - 01:51 | 6554136 thunderchief
thunderchief's picture

Anything to prop up those 50 PE stocks in an imploding economy.

 

Wed, 09/16/2015 - 02:05 | 6554144 bid the soldier...
bid the soldiers shoot's picture

Tyler, please stop calling it malicious short selling. The Chinese may call it that to save all the characters needed to say "short selling while you still have a large long position in an account you don't think we know about."

And for your information, the characters for "insider trading' are the ones for a pork bun vendor and for a gerbil.  

:oP

Wed, 09/16/2015 - 02:25 | 6554156 Consuelo
Consuelo's picture

> Packed stadium execution

> Mobile organ harvester

Wed, 09/16/2015 - 03:24 | 6554196 Colonel Klink
Colonel Klink's picture

Can we please arrest the scumbag bankers here in the US and do the same with them as the Chinese do?  A bullet to the back of their head and a bill to their family for said bullet.  Now that's justice I can get behind.

Wed, 09/16/2015 - 04:04 | 6554215 sTls7
sTls7's picture

Read the headline wrong... thought it said... market putrification.

Wed, 09/16/2015 - 04:46 | 6554236 SirBarksAlot
SirBarksAlot's picture

He must have missed that "secret meeting" on the roof of their headquarters.

Wed, 09/16/2015 - 04:48 | 6554237 Caught_Fish
Caught_Fish's picture

Wondering who the new prime minister of Australia is?

http://www.theguardian.com/australia-news/2015/sep/14/malcolm-turnbull-a...

Wed, 09/16/2015 - 05:22 | 6554271 falga
falga's picture

usually Chinese laws allows you to be under detention for up to 7 months while investigation goes on. Has happened to a number of executives including the head of Trafigura in Beijing who was also a Singaporean citizen

Wed, 09/16/2015 - 05:57 | 6554309 williambanzai7
williambanzai7's picture

Hmmmm, let the purification begin...

Wed, 09/16/2015 - 06:02 | 6554311 Faeriedust
Faeriedust's picture

This is how market failures caused by fraud and corruption -- and they are ALWAYS caused by fraud and corruption -- are handled, when governments are stronger than bankers.  Or do you believe the tripe that medieval Europe's recurrent persecutions of the Jews were totally unjustified, in a time when Jews WERE the bankers?

Financial speculation ALWAYS fosters corruption.  It's the nature of the beast, that things which are so very profitable, done behind closed doors where nobody can see, will corrupt.  Corruption always leads to economic misallocations which have drastic consequences for real people in the real economy.  Generally, it leads to peasants (that's PEOPLE) literally starving and dying as the consequence of bankers skimming off more profit than the real surplus of the economy.  So a government which actually serves somebody -- anybody -- other than the bankers, has to periodically hang a few dozen of them, to keep speculation from getting permanently out of hand (as in, the U.S. today) and reduce the overall death rate from banker theft.  This is what governments which ARE governments, DO.

Not like "governments" which are lackspittle toady fronts for the bankers themselves.

 

 

Wed, 09/16/2015 - 10:12 | 6555022 MSimon
MSimon's picture

The Europeans of that age were very clever. When you persecute the bankers they don't loan you money. They loan money to your enemies.

 

That may have something to do with the rise of England.

 

http://www.zerohedge.com/news/2015-09-07/bed-despotic-house-saud#comment...

 

Evidently the bankers financed wars against their enemies. The banker haters were too clever by half.

 

My solution to the banker problem is simple. Don't borrow money from them.

Wed, 09/16/2015 - 06:10 | 6554321 Montani Semper ...
Montani Semper Liberi's picture

SHCOMP up 4.9% last night.

See what happens when you make the selling of stocks a crime against the state? Genius I tell you. Why hasn't this been done before?

Wed, 09/16/2015 - 06:22 | 6554329 nmewn
nmewn's picture

Citic Securities President Cheng Boming (sobbing): Insider trading? You mean like bouncing the yuan up & down like a yo-yo!?

Vice Minister of Public Security Meng Qingfeng (a cigarette dangling from lip, leans in and smiles): That insolence will cost you your last fingernail, comrade ;-)

Wed, 09/16/2015 - 06:22 | 6554330 henry chucho
henry chucho's picture

I'm sure the bamboo shoots growing up Mr Chengs rectum are speeding up the "purification" process..

Wed, 09/16/2015 - 06:41 | 6554361 spanish inquisition
spanish inquisition's picture

The Chinese have some pretty big balls interfering with God's financial minions. I wonder how God will respond. Plagues and pox, or a down grade?

Wed, 09/16/2015 - 06:49 | 6554378 Stormtrooper
Stormtrooper's picture

CIA explosions will move from warehouses to government facilities.

Wed, 09/16/2015 - 08:44 | 6554634 SmedleyButlersGhost
SmedleyButlersGhost's picture

..... if Goldman Sachs' Lloyd Blankfein was probed ......

let me savor the thought

Wed, 09/16/2015 - 08:57 | 6554683 J Jason Djfmam
J Jason Djfmam's picture

His namre is Rroyd Brankflein.

Wed, 09/16/2015 - 10:05 | 6554991 toadold
toadold's picture

Ooohhhh Yes. Him, Bernake, others abductied by "Aliens" with nuclear powered vibrating and spinning butt probes.  Aliens record process and post on the Internet

Wed, 09/16/2015 - 09:01 | 6554699 Downtoolong
Downtoolong's picture

Uh oh, sounds like somebody missed a kickback payment.

Go ahead and defaullt on your debt, we can back you up on that. But, miss a kickback payment and you're going to jail pal.

 

Wed, 09/16/2015 - 10:03 | 6554982 MSimon
MSimon's picture

Funny. He doesn't look Jewish.

Wed, 09/16/2015 - 10:28 | 6555119 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

That's rayciss.

Wed, 09/16/2015 - 10:48 | 6555246 messystateofaffairs
messystateofaffairs's picture

Rather than the corrupt and complicit SEC and Injustice Dept probing the heads of the too big to jail con artist companies they should all be having their bottoms probed by the inmates of the deparment of erections.

Wed, 09/16/2015 - 15:34 | 6556926 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

Rroyde Brankfein, he so sirry.

Thu, 09/17/2015 - 01:31 | 6559258 bid the soldier...
bid the soldiers shoot's picture

You see from the article's chart how Shanghai Composite took off in November 2014.  Goldman Sachs must have wined and dined every large brokerage in China, telling them that when the West was permitted to own A shares, the market would go into orbit.  The brokerages, with this info, made 80 million cold calls and signed up 40 million new customers. Both these Chinese farmers and Goldman Sachs bought stock.

Only Goldman started shorting their purchases and the Chinese farmers didn't know what that meant.

According to press reports, some foreign-invested onshore companies trading in PRC securities or futures have been the targets of such investigations. The China Securities Regulatory Commission (CSRC) is also reportedly paying attention to foreign investors’ shorting of A-shares or the A-share index (such as the SGX FTSE China A50 Index Futures) via offshore transactions.

 

At the same time, there are some in the Chinese market who blame the market plunge on hostile foreign investors seeking to make profits from a falling A-share market. 

 

The PRC stock exchange has imposed a three-month suspension of trading on 34 securities accounts that have been involved in frequent order routing and cancelling, one of which belongs to a trading subsidiary established by an international hedge fund.

http://www.metrocorpcounsel.com/articles/32912/will-china-tighten-its-gr...

Tue, 09/22/2015 - 03:25 | 6577847 onmail1
onmail1's picture

Cabal of Satan America backed by Pentagram of Evil (Pentagon) wrecking havoc on planet earth.

Decepticons Transformers.

Sacrificing peoples lives , harvesting souls 

Devil at work

Beast of Revelation 

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