Man charged over share tips

By Xu Fang | April 29, 2009, Wednesday |

Print Edition

A MAN who allegedly persuaded investors to pay to join his unlicensed investment company with the promise of high profits was arrested yesterday.

Minhang District prosecutors charged Shen Pingquan, 53, a Zhejiang Province native, with contract fraud. His alleged partner, Yin Hong, a 28-year-old Anhui Province native, is still at large.

Prosecutors can't say how many victims were involved because Shen claimed not to remember and he didn't keep accounts.

Shen told prosecutors that he and Yin had discussed opening a company in Shanghai to recommend profitable shares to its members in January 2008 at a time when many investors were eager for advice from stock market experts.

"Neither of us knew much about securities. We never thought of applying for a business license," Shen is said to have told prosecutors.

The pair recruited a few employees to call investors whose details he had bought online. They were told to say the company was a professional securities institution and could promise high profits.

Bai Bing, a teacher in northeastern Liaoning Province, received a phone call in March 2008. She paid 5,000 yuan (US$732) as a membership fee and the shares the company recommended did make a profit. However, after she paid an extra 30,000 yuan to become a "diamond" member, subsequent investments failed to pay off.

In a bid to recoup her losses, at the suggestion of company staff, she paid 20,000 yuan for a "procedure fee" to apply for compensation, prosecutors said, after which she was unable to contact the company and called the police.

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Man charged over share tips

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