Market Maker

April 7, 2008 / Add comment

Insider trading remains rife in China: Managers of some publicly run investment funds often tip off private traders before the fund makes major stock purchases. Government purchases almost inevitably boost stock prices, giving those tradere a quick profit to split with their inside source. Lin Ronshi, who made almost a million dollars this way, now spills the beans to Forbes. Fund managers often feel underpaid and even those caught leaking information usually escape jail sentences -- some managers are so complacent they actually buy the stock themselves, an illegal tactic known in local parlance as "rat storage." Epstein's article is perhaps overly detailed for the casual reader, but uncovers some breathtaking criminal behavior.