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China fund manager, arrested after market crash, admits to manipulation
[SHANGHAI] A well-known Chinese hedge fund manager detained last year in a crackdown on financial crimes in the wake of a stock market crash has pleaded guilty to manipulating the market, according to the court where he is standing trial.
Xu Xiang, general manager of Shanghai-based Zexi Investment, who earned nicknames like "Hedge Fund Brother No 1" and "China's Carl Icahn" in local media, was detained in Nov 2015.
Mr Xu and two others standing trial pleaded guilty to manipulating the stock market and asked the court for leniency in sentencing, the Qingdao Intermediate People's Court, in the eastern province of Shandong, said in a statement.
Chinese authorities blamed market manipulation and"malicious" trading in stock futures for stoking share volatility that sent Chinese bourses tumbling more than 40 per cent in the summer of 2015.
Investigations netted journalists, senior executives in brokerages, foreign and local hedge fund managers and even securities regulators.
The government tried desperately to try to arrest the stock market's fall, including emergency measures like banning major shareholders from selling stakes, restricting trading of index futures and launching a state-backed stability fund to prop up share prices.
The Chinese financial news website Caixin said at the time of his arrest that the low-profile Mr Xu had been respected "as a legendary punter with a knack for successfully timing investment moves according to volatile stock market swings".
It said his funds had scored annual yields of 160 to 323 per cent as of October 2015.