China has sentenced a former star hedge-fund manager to more than five years in prison for market manipulation, a court said, after an investigation following a stock market slump in 2015.

Xu Xiang, manager of the Shanghai-based private equity fund Zexi Investment, and two other executives were found guilty of market manipulation and fined an unspecified amount, the Qingdao Intermediate People's Court announced on a verified social media account.

Xu's was the first insider trading case to be brought to court in the country and involved more than 40 billion yuan ($5.8 billion), respected Chinese financial magazine Caixin reported.

Xu received five and a half years, while associate Wang Wei received three years and Zhu Yong two years with a three-year suspension.

Investigators targeted several investment executives on suspicion of insider trading after a 2015 stock rout that saw the Shanghai stock index tumble nearly 40 percent over a period of little more than two months after peaking in mid-June that year.

Authorities helped inflate the bubble by encouraging investments. But when it burst, officials quickly sought to pin blame on market manipulators.

A star investor, Xu's company managed four of the top performing Chinese hedge funds during the stock market meltdown, according to Bloomberg News.

Mainland Chinese stock exchanges have an unusually high proportion of non-professional investors and have been compared to "casinos", with insider trading and dramatic swings in share prices seemingly unconnected to underlying business prospects.

In November, after Trump's shock victory in the US presidential elections, a Chinese company whose name sounds like "Trump wins big" saw its shares surge, while a stock whose name is a homophone for "Hillary shares" plunged.