US Charges Chinese Hedge Fund Executive With Trade Secrets Theft

A top executive at a China-based hedge fund has been indicted in the United States and charged with stealing trade secrets from his former Boston-based employer, quantitative investment firm Arrowstreet Capital.

Xiao Zhang, 33, was charged in an indictment unsealed last week in federal court in Boston with illegally making copies of his former employer’s code, projects and research in 2021 to aide his newly-established investment firm in China, Reuters reports.

The indictment marked the latest in a series of cases by the U.S. Department of Justice seeking to crack-down on what U.S. authorities have long described as wide-spread trade secrets and intellectual property theft by actors in China.

The indictment did not identify the name of Zhang’s current investment firm or his former employer, which was described as a global investment manager that had employed Zhang as an associate in its research division starting in 2015.

But registration data maintained by the self-regulatory industry body the Asset Management Association of China (AMAC) said that Zhang previously worked in the research department of Arrowstreet from 2015 to 2021 and is today the executive director of Shanghai-based Pinestone Asset Management.

Arrowstreet is a global asset manager that in 2023 had about $177 billion in assets under management, according to filings with the U.S. Securities and Exchange Commission.