The South Korean authorities have arrested four more crew members from the ferry that sank last week, bringing the total number detained to 11.
Police have also raided offices of companies linked to the ferry's owners.
Search teams are continuing to recover bodies from the submerged hull of the passenger ferry.
One survivor has described taking the agonising decision to save himself as the ship capsized and water washed away students he was trying to rescue.
The number of people known to have died in the accident has reached 150, with another 152 still missing, most of them teenage children from a single school in Ansan, outside the capital Seoul.
An emotional memorial service took place near the school on Wednesday, with friends and family members laying flowers in front of photographs of some of those who died.
The government is under strong public pressure to find out why the ferry capsized.
Twenty-two of the 29 members of the ferry's crew survived and prosecutors say the 11 arrested were on the bridge when the ship listed and sank within two hours of distress signals being sent.
The BBC's Jonathan Head on the island of Jindo, where the recovery operation is being co-ordinated, says authorities are moving quickly against those they blame for the disaster.
Companies associated with Incheon-based Chonghaejin Marine Company, which owned the 6,825-tonne Sewol ferry, have also been raided by police as part of the investigation.
Authorities have issued 30-day travel bans to more than 70 executives connected with Chonghaejin and its affiliates while they are investigated on possible charges ranging from criminal negligence to embezzlement.
"We will also make efforts to retrieve profits made out of criminal acts and track down hidden assets to support financial compensations for [potential] lawsuits by families of the victims and the missing," a prosecutor told AFP.
Survivors have spoken of the struggle to save the hundreds of passengers trapped below the tilting decks as cargo containers toppled into the sea.
Lorry driver Eun-su Choi spoke of his regret in an interview with the BBC at being unable to come to the rescue of passengers trapped on the vessel.
He had made the ferry journey hundreds of times. He had just had breakfast and gone up on the deck to smoke when disaster struck.
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A truck driver onboard the ferry tells the BBC how he tried to save passengers
"All of a sudden the ship tilted and started to sink. Containers started to fall off into the sea, and I realised we were going to capsize," he said.
"I was clinging on to the handrail. I tried to save some of the students in the cafeteria. They were sliding around on their knees by the cashier's desk."
He added: "We were trying to pull them up with a fire hose, but it was very difficult to rescue them. We then decided to climb up, but I now regret it."
He said his friend managed to pull a six-year-old girl to safety after she was passed by her parents and other passengers, hand to hand.
He said the parents and passengers, who did not survive the ordeal, were "the bravest people of all".
All of the people he saw helping the girl were swept away by the water, he added.
'Akin to murder'Reports suggest that passengers were told to remain in their rooms and cabins as the ship listed, amid confusion on the bridge over whether to order them to abandon ship.
The first distress call from the sinking ferry was made from a mobile phone by a boy with a shaking voice, officials told Reuters.
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Divers have begun to access cabins on the ferry, as Jonathan Head reports
His plea for help was followed by about 20 other emergency calls from children on board the ship.
A crew member quoted by local media said that attempts to launch lifeboats were unsuccessful because the ship was listing too severely. Only two of the vessel's 46 lifeboats were reported to have been deployed.
South Korean President Park Geun-hye has condemned the conduct of some of the crew, calling it "akin to murder".
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