Authorities detained Li Cheng, High-Flyer Quant's marketing chief, in November 2024 on charges related to illegal commission schemes. High-Flyer Quant serves as the parent company for DeepSeek, an artificial intelligence startup that competes directly with OpenAI. The corruption scandal threatens to damage DeepSeek's reputation despite the company's technological achievements. Investigators discovered that Li collaborated with Meng Pengfei, a former China Merchants Securities manager, to funnel prohibited brokerage rebates. The fraudulent operation generated approximately $16 million through illegal kickback arrangements.
Li received roughly $3 million from the scheme while Meng collected $11 million as the primary beneficiary. Liu Huan, a private wealth executive at China Merchants Securities, accepted $1.37 million to facilitate transactions. Meng attempted to prevent exposure by offering gold bars worth $417,600 to securities firm leadership. High-Flyer Quant maintains that Li acted independently without the company's knowledge or approval. DeepSeek CEO Liang Wenfeng, who co-founded High-Flyer Quant, may face questioning regarding these activities.
Li received roughly $3 million from the scheme while Meng collected $11 million as the primary beneficiary. Liu Huan, a private wealth executive at China Merchants Securities, accepted $1.37 million to facilitate transactions. Meng attempted to prevent exposure by offering gold bars worth $417,600 to securities firm leadership. High-Flyer Quant maintains that Li acted independently without the company's knowledge or approval. DeepSeek CEO Liang Wenfeng, who co-founded High-Flyer Quant, may face questioning regarding these activities.
