China targets suspected breach of stock dealing rules

Investors look at computer screens showing stock information at a brokerage house in Shanghai, China.
Aly Song | Reuters

China's securities market regulator and police are cracking down on suspected violations of stock dealing rules and the fabrication of trading information, the latest step in a slew of measures to clean up markets amid wild exchange gyrations.

Police are investigating eight employees of the country's largest brokerage, CITIC Securities, for suspected illegal securities trading, the official Xinhua news agency said on Tuesday.

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An employee and a former employee of the China Securities Regulatory Commission (CSRC) are suspected of insider trading and forging official documents and seals, while a journalist and others are suspected of fabricating and spreading false securities and futures trading information, the agency said.

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In separate stock exchange statements posted late on Tuesday, four Chinese brokerages said the regulator was investigating them for failure to properly identify clients.

Haitong Securities, Founder Securities, Huatai Securities and GF Securities saw their share fall after they said the CSRC was looking for failures to review and verify client identity, in line with rules.

In July, the CSRC said it would investigate suspected market manipulation after Chinese stock market turmoil started around mid-June.