The Shenzhen Municipal Public Security Bureau at a press
conference yesterday warned the public to be on the alert for
investment consulting fraud after eight illegal securities
investment consulting agencies were found soliciting clients and
offering advisory services not approved by the authorities.
Li Honglang, head of the economic crime investigation bureau
under the municipal public security bureau, however didn't reveal
the names of the agencies as the cases are still under
investigation.
Li said none of the eight illegal agencies had been approved by
the China Securities Regulatory Commission and nor had they been
registered with the local industrial and commercial administrative
bureau using actual company information.
By waiving membership fees, and advertising through TV, phone
and the Internet, the eight illegal agencies convinced a number of
investors to give them their trading codes and passwords. Some even
falsely represented legal securities investment consulting
agencies.
These agencies, which have between 20 and 100 clients each, are
mainly based in Luohu and Futian districts. Li said these agencies
had persuaded their clients to give them between 400,000 yuan
(US$50,000) and over 5 million yuan to be invested in the
securities market.
Some agencies did not sign any written contracts with the
investors, he said.
The economic crime investigation bureau also found seven cases
of fraud committed by illegal consulting agencies or individuals.
They sent text messages to members of legal consulting agencies,
pretending to be officials with the supervision office of the China
Securities Regulatory Commission or investigation team of Shenzhen
Stock Exchange.
They also sent investors documents bearing the seal of
"supervision office of China Securities Regulatory Commission" or
"investigation team of Shenzhen Stock Exchange which claimed that
the legal agencies were under investigation by the China Securities
Regulatory Commission. They would then tell the investors that they
would take over and ask the investors to pay their consulting fees
again.
Li warned investors of possible risks. "Take care when making
investments with agencies that assure you of easy money," he
said.
(Shenzhen Daily December 20, 2006)