Riding the bull is certainly not easy sport
Updated: 2007-08-07 11:44
It's a record: 13 million yuan ($1.72 million) in 103 days. That won Wang Xiujie a sobriquet, too: "Big Brother Leader 777". But the nouveau riche's story didn't end like a fairy tale. He has been arrested for running an unlicensed securities consultancy business.
So what's the story behind the story? The answer lies in the charge of the bull in the stock market and the ever-increasing number of small investors. The Shanghai Composite Index has catapulted from 2715 on January 4 to above 4600 today. And during its peak, an average day saw more than 300,000 people opening A-share accounts.
These fresh investors were Wang's perfect targets to make a quick buck in extra quick time. On December 25 last year, Wang opened his first QQ (instant messaging) club to pass on tips to stock investors, but for a fee: 3,000 yuan a year.
In the next several months, Wang set up 12 more QQ clubs, each with 100 to 120 members from more than 20 provinces and cities. Such was the demand for tips that Wang more than doubled his fee, to 7,000 yuan.
A man surnamed Liu from Xiamen in East China's Fujian Province was among Wang's first batch of members. "In the beginning, I did make some money from the stocks that Wang suggested. But later, I lost a lot more because of his wrong tips," he says. Liu had suffered enough loss and couldn't take it any more. So he moved court against Wang, prompting police to arrest him earlier last month.
Wang's case is just the tip the iceberg, for there are hundreds of "Big Brother Leader 777," in the country. One has to just log on to a stock-trading website such as http://guba.eastmoney.com to see some of the sensational advertisements promising 20 to 30 percent returns within a week.
Business reporter Liu Qian says she often gets text messages asking her to buy or sell a particular stock at a designated time. But she has never trusted them. "How can strangers send you money - that too without any reason?"
Though Wang's case has been an eye opener for some investors, there are those who still refuse to see the writing on the wall. Wu Hua, of Ningbo in East China's Zhejiang Province, still subscribes to a QQ club for insider information, even though he knows everything about Wang.
"Information from our club is more reliable," Wu says with confidence. He insists that "his" club is different from that of Wang's. "I've tried it several times, and it really works. And the charge is reasonable."
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What Wu and his likes don't know is that that under Articles 122 and 197 of the Securities Law, any institution or person conducting securities business without a license is deemed illegal, says lawyer Lin Tezhi. "The implementation of this rule, however, is not so easy, given the covertness of such cases," the Jingtian Law firm professional says.
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