An old investment company, the so-called “stock recommendation service” turned out to be a fraud, the APP software developed by the company did not have the function of preferred stocks, the customer paid money, but behind it was called “fool” by the salesman. Do you dare to believe?
Recently, Longgang Branch of Shenzhen Municipal Public Security Bureau released a work update, which put Huaxun Investment, a company listed on the New Third Board, into the spotlight. Under the overall command of Shenzhen Municipal Public Security Bureau Interpol Dettion, Longgang police combined with Futian police more than 800 police forces raided an office building in Futian District, Huaxun Investment more than 100 suspects have been taken criminal coercive measures, including chairman Zhou Moufu, 12 company executives were arrested by Longgang District Procuratorate according to law. This news makes the scam of Huaxun investment exposed to the world, according to preliminary statistics, Huaxun investment fraud victims all over the country, involving 2.7 billion yuan.
From a licensed investment firm to a “fraud company”, what happened to Huaxun Investment?
12 executives of Huaxun Investment Co., Ltd were arrested for “cheating stupid customers” worth 2.7 billion yuan
A few days ago, Futian District, Shenzhen City, under an office building, more than 800 police raided and entered, the destination pointed to Huaxun investment office area.
It was a very successful operation. When the police filed into the office area, the employees of Huaxun Investment were still at work. They were even a little confused about what was happening suddenly. One by one, at the direction of the police, they rose from their seats, turned around, and put their heads in their hands. The whole company more than 100 people, a net capture.
Shenzhen police have been eyeing Huaxun for nearly a year. In March last year, a woman surnamed Wang, who bought Huaxun Investment’s “big data stock picking” service, reported to the police because she felt cheated because she was deeply trapped in her shares. The strange thing is that the company learned that after Ms. Wang reported the case, in the representative and Ms. Wang bargaining refund at the same time, but also asked Ms. Wang to delete the APP use records and chat with the salesman, and abet its withdrawal. To this, shenzhen longgang police suddenly alert up, set up a special investigation group.
Under a check, and Ms. Wang’s situation similar to the report there are many cases, not individual cases. Police continue to trace and find that the so-called “New Third Board listed companies” turned out to be a nest of cheaters. According to the work update released by the police, Huaxun Investment started to operate in an office building in Futian District in 2015 and was listed and traded on the New Third Board in October of this year. Almost all of the company’s revenue came from its securities investment consulting service fees. And its securities investment advisory services, or can be called “stock selection”, “stock recommendation” services, but in fraud.
First calling from huaxun investment in the network on a large number of advertising, claimed to have “free to receive three shares”, when people leave a contact way, after the company salesman begin to contact people, pull it into the “stock exchange”, members of the group of mostly, endless praise the company strength is strong, good commend the stock returns, plus some P corporate earnings screenshot, bills, such as “evidence”, into the group of people after being repeatedly “brainwashing”, to the so-called “App to pick stocks, earning profits from 1 to 3 times a month” bang however move, make money become a formal customer.
Once you have the money, turn your face over. Customers who had paid were removed from the stock exchange group under the name of “one-on-one service”. When the customer found the stock “not rising but losing” in the APP operation, the customer service either said that he was too busy or simply ignored it. The so-called “one-to-one service” is also a myth.
According to the police, the three free shares recommended by Huaxun Investment in the morning every day are actually relatively active and volatile in the near future, with a high probability of rising and falling. For the rising stocks, the salesman to the client hype; To fall among them, say nothing about it. As a result, Huaxun investment “recommended stock teacher” in investors to set up the image of “God forecast”.
This point is reflected incisively and vividly in the “high open stock”. During the collective auction before each day’s trading, the opening price has been released, although the stock has not yet begun trading. This kind of stock, can open to open directly high even harden. Huaxun Investment on the opening of the collective bidding stage, will be these “high open shares” recommended to clients. Customer a look, the stock trend is not expected Huaxun investment.
If a client questions the decline of a recommended stock. Huaxun investment also said, “free of gold and sand, this is because there is no purchase of the company’s recommended software, no trading signal.” Take this opportunity, Huaxun investment strong marketing recommended software.
Employees are well aware of the company’s fraud. “In fact there is no technical content, is to put some information gathering together, these measures our own did not understand,” a responsible for APP development staff said, “actually push stocks or artificial selection on the APP, the APP is just a carrier, said big data algorithm just in order to appear more high-end, anyway, I don’t buy it myself.”
In the communication group composed by the employees of the company, someone said bluntly, “You several discuss how to cheat customers’ money first.” Some people brazenly brag to their friends, “Our company just cheats fools of customers’ money, and only those who have no culture and common sense will buy these products and services”, “I feel our customers are so pitiful, they have been cheated of a lot of money”.
According to the preliminary statistics of the police, the victims were all over the country, and the amount of money involved reached 2.7 billion yuan.
How does the old investment company go on the road of no return?
Huaxun is not a pheasant company. According to the Sky Eye survey, Huaxun Investment was established on November 16, 2000, and its business scope includes securities investment consulting business; Enterprise planning; Handicraft sales, etc. According to public information, Huaxun Investment is one of the companies that obtained the investment license earlier.
On October 29, 2015, Huaxun Investment was listed on the New Third Board. According to the public transfer prospectus at that time, the company’s main business is to provide professional, exclusive and focused high-end securities investment advisory services, the company’s business through the operation of the three information websites to carry out, including Beijing branch operating Huaxun financial website, Shenzhen branch operating Huaxun financial website and Huaxun investment website.
Among them, Huaxun financial website for users to provide all kinds of financial information, and on this basis for paying users to provide including trading treasure house, wealth, treasure house, training courses and other value-added services; While providing various kinds of financial information for users, Huajun financial website will direct some users with higher demand to Huajun investment website, which will provide paying users with weekly report, daily report, short-term attack, private customization and other services.
The year after listing on the New Third Board, the control of Huaxun Investment changed. Through the acquisition of the company’s shares held by other shareholders, Li Ni exceeded the shares held by Chen Cao, the original controlling shareholder and actual controller, and became the new controlling shareholder and actual controller of the company (holding 39.36%). In 2017, Li Ni’s husband Zhou Chuifu also became a shareholder of the company, holding 1.67%.
At that time or securities investment consulting, savage growth era, a mess with the industry pointed out that “bad money after bad money” has become the ecological problems, the more behave more won’t make money, especially with the rise of mobile Internet, non licensed institutions, disrupt the licensed agency business at the same time, also let a part of the licensed institutions in order to survive and play “chip”.
Below the operation of rich husband and wife in Zhou Chuifu, Huaxun investment opened rapid expansion. In 2016, the company’s workforce ballooned from 362 to 2,827, with sales staff growing tenfold from 198 to 2,136. Data from Flush iFind shows that from 2015 to 2017, the revenue of Huaxun Investment increased by 14.43 times from 59.843 million yuan to 923 million yuan. The net profit attributable to the mother increased from 15.8922 million yuan to 81.2633 million yuan, an increase of 4.11 times.
High growth back, mess. In 2017, due to the development of the securities investment consulting business matters not properly handle customer complaints, did not exist in the retained complete customer profiles such as violation of the interim provisions on the securities investment consulting business behavior, the company received dalian regulatory bureau of the administrative regulations, 7 branches also received their respective local regulatory administrative regulation. In May 2017, Huaxun Investment Beijing Branch was punished by Beijing Securities Regulatory Bureau. The latter issued a decision to suspend new customer measures to Huaxun, which ordered it to not carry out marketing promotion, new customer investment services and other business activities within the following six months, and should report the rectification progress to Beijing Securities Regulatory Bureau on a monthly basis.
As a result, in the rectification work report, the Beijing branch claimed to stop the new business, but in fact, it still carried out the new business in spite of the punishment. Therefore, in May 2019, the Beijing Securities Regulatory Bureau announced that it was fined 250,000 yuan. In addition to the Beijing branch, in 2019, Huaxun Investment and branches in many places were also taken administrative supervision measures by securities regulatory bureaus such as Dalian and Shenzhen due to securities investment business violations.
According to the news released by the Public Security Sub-bureau of Longgang District, Shenzhen, Huaxun Investment mainly provided consulting services through manual connection until April 2020, but failed to provide the promised services, resulting in a large number of customer complaints. Complaint a lot, by the local security supervision bureau to understand, Huaxun investment is about to face punishment. The process has continued since 2017.
Complaints, punishment is also in the second, more to Zhou Chuifu shocked is that domestic peers for “artificial recommendation” was sentenced, in order to avoid risks, Huaxun Investment later thought of a move, emergency research and development launched “Huaxun Stock” APP to “cover up the nature of fraud”. But the App’s algorithm is a mess, with no function to select stocks at all.
The deception will eventually be exposed. In 2020, Longgang District Public Security Sub-bureau found something strange in Ms. Wang’s report. After more than nine months of careful investigation, they finally started to take action. On January 8, 2021, Li Ni and Zhou Chuifu, the actual controllers of the company, were detained by Longgang Sub-bureau of Shenzhen Municipal Public Security Bureau on suspicion of fraud. Among them, Li Ni was released on bail on February 3.
Recently, under the overall command of Shenzhen Municipal Public Security Bureau Interpol Dettion, Longgang police combined with Futian police more than 800 police forces raided Huaxun Investment Office, more than 100 suspects were taken criminal enforcement measures, including chairman Zhou Moufu, 12 company executives were arrested by Longgang District Procuratorate approved according to law.
Reprint indicated source：Shine Trader Limited Live information