Police halt 15 million yuan online trading scam

Two companies based in Nanjing allegedly traded within their own accounts to illegally shoot up stock prices and then defrauded investors to buy while they sold.

Forty-five suspects have been netted in an online commodity trading fraud case involving 15 million yuan (US$2.26 million), Shanghai police said on Thursday.

The suspects, based in Nanjing, Jiangsu Province, allegedly rigged transactions of red wine on a commodity trading platform and caused millions in losses for investors.

Investigations began in August in Jinshan District, where one of the victims reported to police that he had lost 180,000 yuan on the online platform.

The victim, a man surnamed Li, said he made several profitable investments using the platform under the guidance of its “customer service” staff, and was then enticed to invest even more money. 

But he soon made a huge loss because the commodities were locked in "limit-down", which means that he couldn’t sell them anymore.

Ti Gong / SHINE

The trading interface on the online commodity trading platform.

Police found that the “customer service” Li communicated with was actually another company trading on the platform with suspicious trading records.

That company and another one, controlled by three major suspects surnamed Zhao, Xu and Han, allegedly traded within their own accounts to shoot up the prices of a red wine brand, and then defrauded investors to buy while they sold.

At lower prices the companies would buy again, shoot up the prices and then dump the “shares” on defrauded investors, police said.

It worked just like a stock market, but the platform had made all member traders sign a contract which banned them from rigging transactions, according to the police.

The companies hired a large number of people to work as “customer service” to approach investors, police said.

The gang was rounded up from three locations in Nanjing last month.

Ti Gong / SHINE

Shanghai police, together with their Nanjing colleagues, raided the companies in Nanjing last month.

Special Reports