BIZCHINA / Center
Forex watchdog warns online fund fraud
(Xinhua)
Updated: 2007-03-29 11:00
China's forex watchdog has alerted investors to the growing number of
online scams involving foreign funds.
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Illegal funds purporting to offer investments in foreign assets and
guaranteeing high returns have succeeded in tricking some investors, said
the State Administration of Foreign Exchange (SAFE) on Monday.
The illegal funds used pyramid selling techniques, said SAFE. The
pyramids would quickly collapse once money stopped flowing in, spelling
disaster for investors, SAFE warned.
The administration asked investors to be alert to the risks.
China Central Television (CCTV) reported last month that an illegal fund
named Switzerland Mutual Fund had promised internet investors a hefty 300
percent yield within 450 days.
Claiming to have been founded in 1948, the fund has raised over 100
million yuan on the mainland since it entered the market last year.
But, according to CCTV, the fund has never been approved by the China
Securities Regulatory Commission.
Currently, Chinese individuals who want to invest abroad can only buy
investment products provided by banks and fund management companies under
a Qualified Domestic Institutional Investor (QDII) scheme.
(For more biz stories, please visit Industry Updates)
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