Date
12 December 2017
Regulators are said to have launched a crackdown on rogue trading in the industry. Photo: Investment Europe
Regulators are said to have launched a crackdown on rogue trading in the industry. Photo: Investment Europe

HFT managers quit amid reports of crackdown on rogue trading

Several fund managers at HFT Investment Management Co. Ltd. have resigned since late last year amid rumors that regulators have launched a crackdown on rogue trading in the industry, mainland financial magazine Moneyweek reported Friday.

But HFT, a mainland fund management joint venture of Haitong Securities Co. Ltd. and BNP Paribas, has denied knowledge that the China Securities Regulatory Commission (CSRC) is conducting a probe into some of its fund managers.

“There are rumors in media that we received regulatory notice, but in fact we have not,” HFT was quoted as saying. However, it confirmed reports that several of its fund managers have resigned.

“Some managers have left the company since the end of last year, but we have no idea what has happened to them after they left,” HFT said.

Among those who resigned was Chen Hong, HFT deputy general manager and chief investment officer, the report said, quoting staff from his office as saying on May 8.

HFT staff also said they did not know if the managers were being investigated, but admitted it was not normal to have so many fund managers leaving at the end of last year, according to the report. HFT announced four more fund managers were leaving in late April.

Moneyweek, citing unidentified sources, said the CSRC is investigating into rogue trading activities in the industry, and has questioned five fund managers from HFT, two from China Asset Management Co. Ltd. and one from Fortune SG Fund Management Co. Ltd.

The 21st Century Business Herald quoted an unidentified source as saying that the investigation is leading not only to irregularities in funds but also to insurance companies.

Only one to two of them from HFT are confirmed [to be involved in rogue trading], while the others are just suspects and being questioned by the CSRC,” Moneyweek quoted an unidentified vice-president of a large Shanghai-based fund as saying. It was not clear what specific offenses could have been committed that constituted rogue trading.

On Wednesday, agents of the Shanghai CSRC went to the offices of AEGON-INDUSTRIAL Fund Management Co. Ltd., Moneyweek reported Thursday, citing an unnamed source. The agents talked to the company’s fund managers and checked their computers, it added.

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