http://www.reuters.com/article/us-china-wealth-arrests-idUSKCN0X6009?feedType=RSS&feedName=businessNews
Defaults and fraud cases in China's shadow banking sector have risen in the past few years as the economy has slowed and struggling companies have been forced to pay higher interest rates to raise cash as they try to stay afloat.
The Shanghai arrests come two days after the municipal government launched a crackdown on illegal fundraising as part of a broader effort to stem financial risks.
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Zhongjin's offices were often in some of the most expensive commercial buildings in the country and known for being full of investors eager to put down millions to buy its products. Investors told Reuters they would line up overnight to get a place in the queue, and offices were often full from 8 a.m. until 11 p.m.
They looked like banks, and were often located next to banks, giving them an air of reputability - a common practice among Shanghai wealth management firms seeking to burnish their reputations for stability in the face of rising reports of failure and fraud.
Local media showed posts from social media accounts featuring a young woman claiming to be a manager at Zhongjin, including pictures of her holding what looked like six 100,000 yuan bricks of cash garnished with thinner 10,000 yuan sheafs. More boxes of cash were in the background. Other posts show her driving a Ferrari and claiming to have just purchased a 2 million yuan investment product from the company. Reuters could not immediately verify the authenticity of the images and posts or identify the woman.
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