(China Daily)
Updated: 2007-07-27 09:08

The China Securities Regulatory Commission (CSRC) has confirmed 11 cases of unlicensed securities consulting businesses operating on the Internet, the securities watchdog said yesterday.

Six of the 11 cases are suspected securities crimes and have been handed to the public security bureau, CSRC spokesman Liu Xinhua told China Daily yesterday.

Liu said that Wang Xiujie, known among investors as "Big Brother Leader 777", will face charges of running an unlicensed and illegal securities consultancy business.

"Wang's behavior broke the 122nd and 197th items of the Securities Law, which forbids any institution or person to conduct securities business without receiving a license from the regulator,"Liu said.

The watchdog said illegal behavior in the securities business is becoming "very covert" on the Internet.

"These suspects are using websites, blogs and QQ (instant messaging) to spread tips for stock investors, and charge various fees in the name of so-called memberships, training, services or consultancy," Liu said.

Police earlier this month detained Wang, who is suspected of having earned more than 10 million yuan by selling stock market advice to thousands of subscribers since February, according to the Xinhua News Agency.

Wang sold subscriptions for tips sent by instant messaging, boasting his predictions had a 90 percent accuracy rate, and labeled himself the "patron saint" of individual investors. His blog received more than 30 million hits as speculators rushed to cash in on the bull market.

"Alongside monitoring and striking at illegal securities businesses, educating stock investors is also very important," Liu of the CSRC said.

The securities watchdog received 1,638 complaints about various securities operations in the first half of 2007 and has investigated 524 of them, Liu said.

Self-styled stock gurus and informal fund managers have thrived as China's two stock markets more than doubled last year and surged a further 50 percent this year. The growth has attracted millions of small investors, many of whom have little awareness of investment risks.