Over VND 100 billion in “black money”
In September 2022, the Asset Management Association of China unexpectedly announced that Shanghai Lanling Asset Management, an asset management company 90% owned by Xu Xiaofeng, had its operating qualifications revoked. Xu Xiaofeng is an entrepreneur and finance expert with nearly 4 million followers on Weibo, a popular Chinese social media platform.
Xu Xiaofeng’s personal page, the fraudulent entrepreneur and ‘finance expert’
What many didn’t know was that since July 2022, Xu Xiaofeng had been prosecuted on suspicion of committing fraud. Investigations revealed that Xu Xiaofeng, leveraging his influence as a social media celebrity, lured over 350 investors to transfer funds, with the amount involved exceeding 30 million Chinese yuan (over VND 105 billion).
According to data from the Asset Management Association of China, Shanghai Lanling was established on April 17, 2006, and registered on September 2, 2015. The company’s management scale ranged from 0 to 500 million Chinese yuan. Before being shut down, Shanghai Lanling had a total of seven private equity products registered with the association, including Lanling Value Development and Lanling Chuzhou Daniu. However, the private equity products managed by Xu Xiaofeng incurred significant losses and have all been liquidated.
Xu Xiaofeng exploited his large social media following for personal gain. Jia Zhi, the executive director of Hualin Securities Asset Management Tribe, told the media that famous “finance experts” often take advantage of social media to identify the weaknesses and interests of their followers. They disguise illegal information as financial investment content, entrapping unsuspecting investors who then pour money into projects that these so-called experts endorse.
Schemes of a renowned ‘finance expert’ and entrepreneur
Information from the official website of the China Securities Regulatory Commission indicated that Xu Xiaofeng was suspected of posting false advertisements about an investment platform on Weibo and during livestream events, deceiving investors into trading on an illegal “50ETF options” platform.
The People’s Procuratorate of Pudong New Area in Shanghai prosecuted Xu on suspicion of illegal business operations, involving crimes related to internet information and false advertising.
Since 2021, Xu had been leveraging his influence to post a large amount of content on various media platforms, including statements such as “you can open an account with a few thousand yuan to invest in options,” “short and long-term two-way trading,” and “high leverage, high profits.”
Xu deceived his followers into downloading the “SSE ETF Options” app to open accounts and trade options, even though this platform was not a legal one approved by the China Securities Regulatory Commission but rather an illegal platform set up by Xu and others.
Specifically, Xu Xiaofeng instructed his employees to promote the product during livestreams and asked customer service staff to entice new investors to join and participate in options trading to earn commissions. After verification by the Shanghai Supervision Bureau of the China Securities Regulatory Commission, Xu and others were found to have established an illegal trading platform, attracting over 350 investors in less than a year, with illegal funds exceeding 30 million Chinese yuan.
In a related announcement, the Asset Management Association of China reminded investors to pay attention to the credibility of private equity fund managers, make cautious investment decisions, and protect their rights and interests through dispute resolution mechanisms and relevant legal provisions.
The association will continue to adhere to the basic policy of “encouraging the good and restricting the bad,” continuously improve the integrity information recording mechanism for private equity funds, and promote the healthy development of the industry in accordance with regulations.
According to Baijiahao
