Investigation Unveils Alleged $2.8M Kickback Scheme

In a shocking revelation, Li Cheng, the head of market operations at the renowned Chinese hedge fund High-Flyer Quant, is now the subject of a formal investigation. The probe centers around allegations of accepting more than 20 million yuan ($2.8 million) in kickbacks from China Merchants Securities (CMS), as reported by Caixin Global this Wednesday.

The Scheme's Timeline and Cooperation with Authorities

The illicit payments are believed to have originated from brokerage commissions spanning from 2018 to 2023. Li Cheng has reportedly been cooperating with the authorities since November 2024, shedding light on the intricate details of the scheme.

Inside the Bonus-Sharing Scheme

This scandal involves a long-running bonus-sharing arrangement with CMS employees, including Meng Pengfei, a branch general manager. Meng allegedly appointed a relative as High-Flyer's dedicated broker, a move that facilitated high commission bonuses. A portion of these bonuses was then passed on to Li Cheng to secure trading business, with Meng keeping over 80 million yuan and another CMS executive receiving 10 million yuan.