Suspects held in illegal futures trading case

Ti Gong

Over 90 suspects are said to have cashed in on software that enabled illegal futures trading, Shanghai police said on Thursday.

The developer of the software, a man surnamed Fang who runs an information technology company in Shanghai, is alleged to have built up an illegal trading tunnel after defrauding a futures brokerage in Hong Kong by claiming to be an authorized broker from the Chinese mainland.

While individual investors who invest in futures through legal channels have to possess a certain amount of capital and face restrictions in leveraged investment, those who invest through illegal channels such as those alleged to have been provided by Fang don’t need to meet any requirement or be subject to scrutiny from risk administrators.

Fang is said to have developed the software in 2017 and sold the service to 57 groups around the country. One such group was led by a man surnamed Wu, police said.

Wu had over 1,000 clients using the software, police said, who were charged 50 yuan (US$7.6) for every trade. Wu is said to have then paid 1.5 yuan to Fang. It is claimed that Wu’s clients invested 129 million yuan through the channel.

Nationwide, users of Fang’s software had invested over 70 billion yuan, police said.

Over 60 of the more than 90 suspects caught by Shanghai police are facing charges of running illegal businesses, according to the police. Suspects from the other 49 groups in 15 other provinces and cities have been cracked down on since July, police said.

SHINE