China rat trader on trial

A Chinese mutual fund manager stood trial on Tuesday in Shanghai for rat trading stocks to a value of 109 million yuan (17.6 million US dollars).

Wei Libo was charged at Shanghai No.1 Intermediate People's Court with making 2.73 million yuan from rat trading in 2009 when he was a fund manager with Soochow Asset Management Co., Ltd.

Rat trading is the use of personal accounts by fund managers to buy shares before the share price is affected by intervention from the fund the trader manages.

Wei bought stocks in 19 companies before the mutual fund he managed also bought them and then cashed in on the price differences.

Wei admitted to the offences and expressed remorse.

He fled to Malaysia in October last year, two days after the Chinese stock exchange regulator began investigating his trades. He turned himself in to Chinese police in April this year.

The court is to announce a verdict on a later date.