Fake Financier Crackdown Set

The Financial Supervisory Service said Wednesday that it would, along with police and prosecutors, crack down on "pseudo" financial firms that promise investors unrealistically high returns.

"Cases involving these illegal companies have been on the rise this year," an official at the supervisory agency said. "Of 107 suspect firms, we reported 37 to prosecutors." He added that the agency would sustain the joint crackdown until the illegal firms are "completely rooted out."

The illegal companies lure clients by offering interest rates of 3-10 percent per month, while guaranteeing that investors can get their full principal back. They also promise to pay 40-60 percent annual dividends to their equity holders. Then they typically disappear with the investors' money and arrange another scam.