China's financial regulators seized control of several insurers, trust firms and stock brokers linked to one of the country's most powerful oligarchs, in a devastating blow against corporate malfeasance and freewheeling capitalism while the stock market is in the midst of a runaway rally.

The latest seizures of Xiao's companies come a year since the regulator took over several regional and provincial-level banks that was engaged in errant lending. The Tomorrow Group's interests span energy, financial services, technology and real estate, among others.