(Yicai Global) March 2 -- Chinese police have raided the offices of security consulting firm Dalian Huaxun Investment and arrested 147 people, including the company president, on suspicion of fraud and running a false advertising scam involving CNY2.7 billion (USD417 million).

President Li Ni, Director Zhou Chuifu and Technical Director Zhou Hongyan have been detained, according to a recent WeChat post by Shenzhen police. They are accused of hiring unqualified staff to lure investors onto a stock recommendation app run by the company which would charge huge fees for “stock trading secrets” with the promise of high returns that seldom materialized.

The investigation is ongoing, the police said.

The Dalian, northeastern Liaoning province-based company was been penalized several times by authorities since 2017 for hiring unlicensed sales staff. Last year alone the firm earned CNY169 million (USD26.1 million) for its “advisory” services.

Editor: Kim Taylor