In a separate investigation, eight people connected to Citic Securities, the country’s largest broker, are being probed by Chinese police for “illegal securities trading“, according to Chinese state news agency Xinhua, along with people linked to the CSRC itself.
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The reporter, from the respected news outlet Caijing, was identified by Caijing as Wang Xiaolu and wrote an article last month that said the government was considering withdrawing its support for the stock market.
Three of the brokerages say they have been told they are being investigated for possibly failing to confirm the identities of clients.
China’s main Shanghai stock index notched a seven-year high in June, but has cratered since then, losing more than 40% of its value as of Tuesday.
Authorities have accused securities firms of manipulating prices, suggesting the ruling Communist Party might be trying to deflect blame for the collapse, which angered small investors.
The Chinese Ministry of Public Security announced on July 12 that investigators had found “evidence to suspect that individual trading companies are illegally manipulating securities and futures exchanges”. It gave no particulars of which companies have been focused.
Citic said it had “not received any notification” on the investigation.
Phone calls to Citic Securities’ headquarters in Beijing weren’t answered.
In a statement to the Hong Kong stock exchange on Wednesday, CITIC Securities said it had not been informed of a probe into staff and the business was operating normally. It’s best recognized overseas for its 2012 buy of Hong Kong-based brokerage CLSA Asia-Pacific Markets from France’s Credit score Agricole for $1.25 billion within the first main overseas acquisition by a Chinese language dealer.
The CSRC has also warned media about spreading false information and turned its attentions to high-frequency traders in recent weeks, part of a broad effort to soothe fears within financial markets over possible price manipulation.
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Alongside targeting brokerages, Xinhua also noted an employee and a former employee of the CSRC were under investigation for insider trading and forging official documents and seals. The companies, Haitong Securities, GF Securities, Founder Securities and Huatai Securities, said that they would cooperate with the investigation and that their businesses were operating normally. It ordered brokers to end the practice and to sever ties with unlicensed companies that lend money to finance trading.
