Twelve stock analysts from Taiwan, China, were detained in Shanghai on suspicion of fraud on Tuesday, with nine having been released on bail and three remaining in detention, Taiwan-based media reported on Saturday.

They all work at a Shanghai-based stock analysis app named Thousand & Billion whose software product aicaopan (love trading) is accused of causing investors losses via recommending stocks that would rise by the 10 percent daily limit. The firm is not certified to sell the products, media reported. 

A notice posted on the homepage of the app on Tuesday said that its analysis and recommendation video programs were suspended due to a system failure, and the company will issue a notice as soon as the system is fixed. The same notice was posted on its Sina Weibo account on Wednesday.

Besides the alleged illegal recommendation and manipulation of shares, another possible reason for the detention is that some of the analysts were not licensed to provide stock market analysis in the Chinese mainland, an industry insider who requested anonymity told the Global Times on Sunday.  

Some of the app users who paid for the services requested reimbursement after news of the arrests leaked out. "Failed just after I paid? Please refund," a Sina Weibo user named Miricajier posted on Wednesday.

Tianyancha.com, a business inquiry service provider, shows that the largest shareholder in Thousand & Billion is Liao Yingqiang, a high-profile stock market analyst who was hit with a fine of 129 million yuan ($18.75 million) by China's securities regulator for manipulating the market and pocketing ill-gotten gains in May 2018.

The arrests come amid the tightening of regulations on securities markets in China, which aim to improve the investment environment and further protect investors' rights and interests, analysts said.

"With bigger fines, [a higher] number of administrative penalty cases and more referrals to judicial authorities, China has strengthened regulation of the securities market," Li Daxiao, chief economist at the Shenzhen-based Yingda Securities, told the Global Times on Sunday.

The more stringent regulations are beneficial for the sound and sustainable development of financial markets, Li said.