Until now perhaps. Likened in the past to both Warren Buffett and Carl Icahn, legendary billionaire hedge fund manager Xu Xiang may now be set for a rapid transformation into his country’s number one rogue trader after his detention for alleged insider trading.
“Big Xu” was the unofficial leader of the “Limit-up Kamikaze Squad”, a group of fund managers in the port city of Ningbo who make risky bets to push stocks up by the 10% daily limit imposed in China. “If you think American traders are aggressive, these guys are three times as big and as fast and crazy…It’s like they’re on speed,” a senior trader told the Financial Times.
While the Chinese media frenzy around Xu is focused on the drama of his arrest (highway patrol cars sealed off the 22-mile Hangzhou Bay Bridge for more than 30 minutes), it also has serious implications for senior Chinese financial professionals.
Government connections and the ability to make money on the financial markets no longer elevate you above the law in China. The country’s recent stock market volatility has put the financial services sector under scrutiny like never before – arrests like Xu’s and those of several Citic executives earlier this year are likely to become more common in the future as the government continues its anti-corruption crackdown. “His detention shows there is no God in this market at all,” Zhou Ling, a hedge fund manager at Shanghai Shiva Investment, told the South China Morning Post. “It was the inside information and conspiracy that helped him to make a killing.”
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