SHANGHAI PROSECUTES FRAUDS WORTH $329 MILLION
Shanghai authorities prosecuted 39 financial professionals, in 23 cases involving nearly 2 billion yuan ($329 million), as of November.
Prosecutions covered embezzlement, bribes, fraudulent fundraising and taking deposits from the public illegally, according to Shanghai prosecutors.
Some of the offenders organized illegal fundraising in the name of selling financial products, and some were guilty of taking bribes for procurement.
Bank clerks said they knew that some of their bosses took advantage of their clients’ resources.
“After years in the position and building up a reputation, they have a large number of clients,” said a bank clerk, surnamed Wu in Minhang district.
“Clients went to them for deposits and loans. The bank managers made money by exploiting the difference in interest between loans and deposits.”
Moreover, the securities market has been affected by manipulation and “rat trading”, as brokers and senior managers of financial institutions used inside information to reap illicit gains and affect share prices, Zou Bihua, vice-president of Shanghai High People’s Court said in October, when Li Xuli, a former private equity star, was given a four-year sentence and fined 18 million yuan for profiting from “rat trading”.
Li, 40, former chief investment officer of Shanghai-based Bank of Communications Schroders Fund Management, traded on non-disclosed information and made more than 10 million yuan in illicit profits.
“Staff in the financial industry must show integrity in their work and the institutions should carry out risk prediction and assessment,” said Lin Zhongming, a spokesman for the Shanghai People’s Procuratorate.