The billionaire hedge fund manager dubbed "China's Carl Icahn" went on trial on Monday, a year after his dramatic arrest on the Hangzhou Bay Bridge in the aftermath of a stock market rout.
The trial of legendary investor Xu Xiang, 38, in the Qingdao Intermediate People's Court in Shandong province was closed to all but selected state media. No immediate statement was issued after the hearing.
State-run Xinhua reported earlier that Xu was detained for "obtaining stock market inside information by illegal means, inside trading and manipulating stock prices".
No further details of the charges were given.
Xu allegedly reaped billions of yuan illegally during last year's stock market turmoil, mainland media reported.
Photographs of his arrest on the bridge were the only known publicly available pictures of the famously low-profile financier at the time.
But even if Xu were found guilty of the charges, the conviction would do little to purge the system of rampant insider trading and market manipulation in its stock market, an analyst said.
"Xu's case is just the tip of the iceberg – there is a sophisticated network of interests behind it," Qingdao University economics professor Yi Xianrong said.
Xu, a self-taught stock speculator, was known for his swift and accurate short-term investment decisions that often led to high returns.
The flagship fund at Zexi Investment, the firm Xu managed, reported returns of 638 per cent in the three years to the end of 2014, the best of any private equity fund on the mainland.
Xu turned down all requests for media interviews, and Zexi's clients were never publicized.
But investigators' suspicions were raised when Zexi's run of good luck continued in the summer of last year.
As US$5 trillion was wiped off the value of the mainland's share markets in just a few weeks, Zexi's funds continued to report hefty returns.
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Amid the fallout, the authorities mobilized police to raid brokerage houses and make a number of high-profile arrests, including senior executives at Citic Securities, a well-connected brokerage house.
High-ranking officials at the China Securities Regulatory Commission, the stock market regulator, were also swept up in the raids but there is no confirmation whether Xu colluded with any of them.
Standing on trial alongside Xu are executives of 13 listed firms. They are accused of conspiring to make illegal profits in a case involving about 40 billion yuan (HK$45 billion), according to mainland financial magazine Caixin.
Yi said Xu's case exposed the many loopholes in the mainland's "legal and regulatory systems" and showed that rules on paper were often bent or ignored in the interests of the rich and powerful.
"In general, China's reforms always slow down if such reforms hurt vested interest groups – the same in the stock market and the housing market," he added.