New York (HedgeCo.net) – As Chinese authorities continue to crackdown on institutional investors, Wednesday saw the police freeze approximately $1 billion in assets of Xu Xiang. Xu is a hedge fund manager and he is currently under investigation for insider trading.

The Ministry of Public Safety placed Xu and his frim Zexi under investigation last week and that adds to the deepening investigation by Chinese authorities as they look for a scapegoat in the increasingly volatile Chinese stock market. So far the investigation has led to investigations in to executives at brokerage firms, securities regulators and even a few journalists.

It is interesting that the Chinese authorities weren’t investigating stock manipulation in the first part of the year when the Shanghai Composite rose almost 60% from the beginning of the year through mid-June. It wasn’t until the index fell over 40% from mid-June through late August that the investigations started.

Rick Pendergraft
Research Analyst
HedgeCoVest