It's spreading.
Photograph by Isaac Lawrence — AFP/Getty Images

Meanwhile, one of the country's top bankers just became the latest victim of Xi Jinping's anti-corruption campaign.

By Scott Cendrowski
November 2, 2015

One of China’s most prominent private equity investors was arrested Sunday morning on suspicion of insider trading, the state-run news agency Xinhua said.

Xu Xiang ran Shanghai Zexi Investment and was considered something of a legend in the market. From the beginning of this year through August 5, after Chinese stocks crashed 27% over a month and a half, one of his funds gained 357%, according to researcher Private Ranking Net, ranking top among 1,649 funds. Another one of his funds rose by 187%. A former colleague told Phoenix Weekly Xu Xiang has made more than $300 million over the past decade.

His arrest is the latest in a string of cases targeting traders involved in the summer meltdown in Chinese stocks that some analysts said was caused by leveraged traders bailing out of the market at the first hint of panic. Earlier this year, Citadel, the massive hedge fund and quantitative trading company controlled by Ken Griffin, had one of its accounts that was managed by a Chinese firm suspended from trading by Chinese regulators. In August, the authorities had also detained Li Yifei, the local head of London-based fund managers Man Group Plc MNGPY

Efforts to reach Ze Xi’s office were unsuccessful. Its official website wasn’t available Monday. At the same time, yesterday, police in Shanghai said a three-month investigation lead to the arrests of three suspects in a case of stock futures price manipulation of almost $2 billion.

What appears clear is that Chinese regulators are trying to apportion blame for the summer’s stock crash that wiped out $5 trillion in shareholder value and dominated headlines around the world. Since then, it has arrested executives at China’s largest brokerage Citic Securities, an employee of the China Securities Regulatory Commission, a reporter at the business magazine Caijing, and others under the hazy description of insider trading and market manipulation.

One U.S. official told Fortune there was obvious law-breaking within Chinese markets, so the arrests might not be surprising.

In January 2008, Xu Xiang’s “intimate friend” Zhou Jianming was prosecuted for manipulating stocks, netting nearly $30 million, according to the China Securities Regulatory Commission. He was later fined the same amount.

In other news Monday, Zhang Yun, the president of China’s Agricultural Bank of China, the country’s third largest, was reportedly arrested at the weekend on a corruption-related inquiry. If true, that would make Zhang the most senior banking official to be swept up in an anti-corruption campaign instigated two years ago by President Xi Jinping. Earlier this year, the president of midsized firm Minsheng Bank was arrested as part of an investigation. Later, a board member of Bank of Beijing was also arrested.

Xi’s crackdown has, however, already hit other sectors of Chinese business. This summer, the former head of China National Petroleum Corp. Zhou Yongkang was sentenced to life in prison, convicted of bribery and other offences.

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