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A giant US hedge fund just had one of its trading accounts suspended in China
(REUTERS/Aly Song)
An investor looking at a computer screen showing stock information at a brokerage house in Shanghai on May 26.
The Chicago-based hedge fund Citadel has had one of its trading accounts suspended in Shanghai as the Chinese government cracks down on so-called abnormal transactions in its crashing stock markets.
"We can confirm that while one account managed by Guosen Futures Ltd. — Citadel (Shanghai) Trading Ltd. — has had its trading on the Shenzhen exchange suspended, we continue to otherwise operate normally from our offices, and we continue to comply with all local laws and regulations," Citadel wrote in an email to The New York Times.
The Shanghai Stock Exchange released a statement saying Guosen's account was suspended along with three others "to maintain order in the market and protect investors' interests."
Citadel, which is helmed by billionaire Ken Griffin, has $26 billion worth of assets under management. Guosen Futures is one of its brokerage units.
Chinese stock indices took a nosedive on June 12, and since then Chinese regulators have been taking extraordinary measures to stop the bleeding. They have thrown money at the problem, suspended initial public offerings and new share issues, and promised to go after "malicious" market participants.
(REUTERS)
On Friday the Chinese government announced it would go after any market participants suspected of spoofing.
Spoofing is a pretty simple form of market manipulation. It is where a trader puts on a huge order, watches the market react, and then cancels the order while also taking advantage of the market reaction its order created.
China's stock-market troubles couldn't come at a worse time.
Over the past year the country's economy has slowed down faster than the government expected as it tries to accomplish the difficult task of changing its economy from one based on investment to one based on domestic consumption. Manufacturing, retail, and other indicators have all been wobbly at best, falling at worst.
There's a lot of rescuing to do.
For the full story head to The Times>
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