The suspects worked for Ezubao, one of China’s largest P2P lenders, which has been described as a Ponzi scheme by Chinese official news agency Xinhua.
Among those arrested was Ding Ning, chairman of Yucheng Group, which launched Ezubao in July 2014.
Over a period of 18 months the finance platform rose from obscurity to become one of the most dominant companies in the industry.
Too high returns
Investors were offered returns far exceeding market norms, with expected annual yields on Ezubao’s six products between 9% and 14.6%.
However, more than 95% of the projects allegedly financed by the scheme were found to be fake.
Ezubao was closed down on 8 December 2015 after police raided offices in several cities and detained executives, including Ning.
With operations spread across 31 provinces; the investigation proved challenging with evidence destroyed and several key suspects fleeing.
At one site in the eastern Anhui Province, police used two excavators to dig for 20 hours to recover 80 bags of evidence that had been buried at a depth of six meters. Around 1,200 account books were uncovered.
China's growing middle class has increasingly been attracted to online investment schemes as people seek to increase their wealth.
But authorities have struggled to regulate the country’s wealth management industry, which is estimated to be worth around $2.6trn.