China warns online finance executives with glimpse of prison

Reuters News
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Posted: Jul 12, 2016 6:18 AM

BEIJING (Reuters) - Shanghai's online finance association showed its member executives a taste of life behind bars on Tuesday as part of an effort to nip crime in the bud in a sector that has been dogged by scandal.

About 50 company representatives heard tales of regret told by jailed financial criminals on a one-day tour of Shanghai Qingpu prison, as part of a program to "strike illegal fundraising fraud", the association said on its website.

They were escorted by a deputy secretary-general of the city's online finance association and prison guards.

"After seeing former industry peers locked-up in jail for breaking their ethical bottom line, the participants all said they have learned a hard lesson," the association said in the posting.

Fraud has proliferated in China's loosely regulated online finance industry, led by the discovery in February of a $7.6 billion Ponzi scheme at peer-to-peer lender Ezubao, which cheated more than 900,000 investors, state media reported.

The government has responded aggressively with the State Council approving a one-year plan to clean up online finance, setting stricter rules for peer-to-peer platforms.

(Reporting By Shu Zhang and Matthew Miller; Editing by Robert Birsel)