Russia's investment bubble could soon burst in an uncontrolled market where millions of people have put money and privatization vouchers in heavily advertised high-risk funds, senior officials warn. "There are funds that collect money from people, pay the one group of investors with cash collected from other investors, collect more money and offer even higher yields," said Maxim Boiko, head of the Russian Privatization Center. "It's like a pyramid scheme. This can't go on for ever. At some point, it will collapse." Boiko said 650 investment funds had mushroomed in Russia since the start of privatization in 1992, collecting vouchers distributed free to the nation to be swapped for shares. Television commercials for Russia's MMM investment fund, for instance, boast dividends of no less than 2,000-3,000 percent a year. "All these television commercials are stunning. They prove there are personal savings to compete for in this country," said Boiko. "But Russia has no unified market. Investments are risky. At some point the bubble will burst and we're getting there." MMM shares, which account for about half of all transactions on Russian stock markets, have leapt from 1,600 rubles (less than $1) in February to 28,000 in May. In a full-page newspaper advertisement this week, the company promised to quote its share prices a week in advance. No one knows how these investment funds offer such high dividends or where they place their funds. Russia has no Western-style public disclosure requirements, let alone a capital markets law regulating securities transactions. "These funds are a big mystery," said Igor Smolkin, financial director at the big Alfa-Kapital investment fund. "No one knows what they're doing with the money they collect. They never publish information about their activities. Their share prices go up, up and away. But unfortunately, such miracles don't exist in nature."MMM officials are secretive about how they makes their money. According to spokesman Bakhyt Kilibayev, MMM earns profits by speculating on hard-currency markets, investing in stocks and offering short-term interbank credits. "We're doing what brings the maximum profit," he said. "Our paper ousts many other shares at Russian exchanges, so allegations of wrongdoing at our company are expected."He added: "The latest rumor on our collapse was from the Russian radio -- they said we would go bust on June 7. Well, it is June 7 already and our company is still running." The news reports originated from a demand by the State Tax Police that three of MMM's 22 divisions submit financial records for review by June 7 or face unspecified sanctions. Authorities have launched three investigations of MMM since 1991, but all have been dropped due to lack of evidence.Already, several big investment funds have collapsed, including the Independent Oil Concern, Impulse-Invest, the Technical Progress Fund and unlicensed St. Petersburg company Amaris.Share scandals could have a major effect on Russia's fledgling equity markets and shake public confidence in privatization, one of the brightest spots of the economy. "The market is developing very rapidly," Alfa-Kapital's Smolkin said. "It's a jungle out there and the Finance Ministry simply does not have specialists to monitor it." Bella Zlatkis, head of the department of public securities and financial markets at the Finance Ministry, declined to comment on investment-fund activities. "Not all of these funds are financial structures. But we must interfere. Things have gone too far," she said.