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Stock dens overthrown
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THREE illegal stock trading centres were raided recently, with 12 criminal suspects netted and 14 computers confiscated.
A preliminary investigation ascertained that more than 300 clients and over six million yuan (over US$720,000) were involved.
An official from a related department said authorities would expedite punishment of illegal trading of securities in a more severe manner, and he encouraged public tip-offs. In the meantime, he warned investors of being cheated if they use other than legal exchange agencies to trade stocks.
The trading dens were located in three different residential buildings, where they lured the investors with offers of financing that could be four times higher than their capital. Without being given a registration card, the investors could start to trade through telephones after showing their ID cards and paying a cash deposit.
The trading, however, virtually had nothing to do with the real stock market and were only simulations. So when the price went down, the investors were urged to buy into more with offered loans. When it went down further, they were forced to sell out and hence the “loss" was taken away from the customers.(Wu Yan)
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