The rapid fall of the 'Goldman Sachs of China'

Great Wall Of China Graffiti

The fall from grace for China’s biggest brokerage and investment bank, Citic Securities, has been fast and steep.

The firm - sometimes referred to as the Goldman Sachs of China - began the year on its way to eclipsing UBS in the ranks of the top four securities firms in the world.

Bloomberg News reports that now it’s embroiled in a police investigation and a probe by the stock-market regulator. Its chairman is being replaced and its top leadership reorganized.

At least nine Citic executives have been investigated for alleged insider trading or haven’t shown up to work and can’t be reached.

The origins of its turmoil lie in its role as the highest flier in China’s developing finance field, caught up in the fallout from a stock market crash starting in June that erased $5tril in value. Encouraged by multiple pronouncements from policy makers that they wanted Chinese firms to develop the finance tools used in the rest of the world, Citic became a leader. Short selling, stock-index futures, cross-border return swaps - all were on the table, all permitted with qualified nods by China’s regulators, until the rules changed and suddenly they weren’t.

To access the complete Bloomberg News article hit the link below:

Citic Short-Selling Offer to Funds Led Police to Its Door

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