High-profile Chinese investor Xu Xiang has been detained on suspicion of insider trading, the Public Security Ministry reported.

A brief statement issued Monday through the official Xinhua News Agency said Xu was suspected of illegally obtaining inside information about the stock market and manipulating prices.

His detention follows a massive decline in stock prices over the summer blamed largely on a government-promoted bubble that has led to a search for scapegoats.

Untethered from economic reality, Chinese stocks soared over the last year, with the Shanghai Composite Index rising 150 percent in the year through mid-June.

On June 12, the bubble burst: Shanghai stocks have since tumbled, though they remain about 40 percent above where they were a year ago.

Backtracking on a pledge to give market forces a greater say, the government tried to stop the freefall. It suspended trading in many companies, restricted the use of borrowed money for some trades and banned big investors from selling their stakes for six months.

Xu's Zexi Investment hedge fund based in the financial center of Shanghai managed to prosper despite the sell-off, along with a select group of other investment firms.

Financial shenanigans have also been targeted under a broad campaign by President Xi Jinping to rein in corruption, especially among government officials and in state-owned businesses.

Xinhua said Xu and several other unnamed individuals had been placed under "coercive measures" over recent days. It said matters related to Zexi Investment were being rigorously investigated.

It wasn't immediately clear whether Xu had been formally arrested.