From the Financial Times:
China’s securities regulator has banned one fund manager from the country’s capital markets for life and another for seven years in a warning to the industry to clean up lax internal controls.
The two managers were banned after buying shares in companies their funds invested in and then selling them for a profit – a practice known as “building a rathole” in Chinese.
Tang Jian, a former manager for China International Fund Management, a joint venture between JPMorgan and Shanghai International Trust Co, was banned for life after storing up Rmb1.53m ($220,000) in his rathole, according to the China Securities Regulatory Commission (CSRC). Wang Limin, formerly a manager at China Southern Fund Management, was banned for seven years after similarly making a profit of Rmb1.5m.