CHINA’S securities regulator Friday said it has handed police five cases of suspected insider trading at a Chinese-foreign joint venture fund management company, in the latest announcement of an official clampdown on stock market irregularities.

    The China Securities Regulatory Commission (CSRC) launched a probe in March into allegations that five managers at HFT Investment Management Co. had made use of inside information to trade stocks, and found evidence of suspected criminal acts, the regulator said in a statement.

    The regulator launched a sweeping clampdown on insider trading in China’s US$1.2 trillion mutual fund industry this year as part of efforts to rebuild investor confidence in the country’s lagging stock markets.

    The campaign sparked an exodus of fund managers from the industry, with more than 100 quitting their jobs so far this year, almost twice as many as in the same period last year, data provider iFund said.

    “The CSRC will all along maintain high pressure on [all parties responsible for] irregularities, including stock trading using inside or disclosed information,” the regulator said in the statement. “Once such acts were found, they will be dealt with resolutely.”

    People in the industry have said that the regulatory clampdown on trading irregularities involving funds has focused on so-called “rat trading.”

    Rat trading involves an employee illegally obtaining information about client orders to buy or sell shares, and then using that information to trade for themselves before the order is executed.

    Regulators are also investigating tip-offs by fund employees to relatives or friends on what stocks the fund plans to buy or sell, allowing them to trade in advance of any movement in the stock price caused by the fund’s activity. (SD-Agencies)