(Yicai Global) Dec. 11 -- Shanghai police have solved 58 cases involving the unlawful trading of overseas futures through private channels worth CNY70 billion (USD10.7 billion).

Ninety suspects have been arrested and 49 criminal gangs across China have been intercepted, Shanghai police said yesterday.

The suspects stand accused of carrying out futures trading without approval from regulators, of using privately developed software to evade authorities, of disrupting the order of foreign exchange controls by changing investors’ Chinese yuan into US dollars through illegal means and of taking advantage of investors’ lack of understanding of overseas markets to trick them into trading on false futures indexes.

Shanghai police were tipped off in January that a group of criminals were soliciting domestic investors to engage in unlawful foreign futures trading, the force said. Overseas futures trading is not permitted on the mainland and is only possible through the Hong Kong branches of Chinese futures’ companies.

In the subsequent investigation, police came across a man surnamed Wu who was using a trading software developed by a local firm to inveigle clients to invest in overseas futures and earn transaction commissions.

Wu and his gang could earn around CNY50 (USD7.6) per transaction. They lured around 1,000 customers into their scam bagging CNY129 million (USD19.7 million).

The police also tracked down another suspect surnamed Fang who had been using a software targeting overseas futures trading on the Hong Kong market since 2017 and was developing illegal cross-border trading channels.

Another 56 cases were uncovered and are being brought to justice, the police said.

Editor: Kim Taylor