Fear spreads in China finance sector amid unprecedented arrests, probes

Beijing

THE high-drama highway arrest of a prominent hedge fund manager. Seizures of computers and phones at Chinese mutual funds. The investigations of the president of Citic Securities Co and at least six other employees. Now, add the probe of China's former gatekeeper of the IPO process himself.

The arrests or investigations targeting the finance industry in the aftermath of China's summer market crash have intensified in recent weeks, creating a climate of fear among China's finance firms and chilling their investment strategies. At least 16 people have been arrested, are being investigated or have been taken away from their job duties to assist authorities, according to statements and announcements compiled by Bloomberg News.