China cracks down on hedge fund industry

China’s securities regulator is cracking down on the fast-growing hedge-fund industry, investigating 10 cases of alleged wrongdoing.

Officials are probing private fund practices including market manipulation, misappropriation of client funds, insider trading and trading by managers using their personal accounts, the China Securities Regulatory Commission said in a statement on its website Friday. Some funds used the Hong Kong-Shanghai stock connect to manipulate prices and some employees sought personal gain by exploiting the hedging mechanism for stock index futures, it said.

China’s booming money-management industry includes private securities investment funds, which take money from wealthy investors and employ hedge-fund like strategies. They’re