Definition of illegal fund-raising

According to Article 2 of the regulations on the prevention and disposal of illegal fund-raising, illegal fund-raising refers to the act of absorbing funds from unspecified objects by promising to repay principal and interest or giving other investment returns without the permission of the financial administrative department of the State Council or in violation of the provisions of national financial management.

Three characteristics of illegal fund-raising

Illegal fund-raising needs to have three elements at the same time:

(I) "without the legal permission of the financial management department of the State Council or in violation of the state financial management regulations", that is, illegal;

(II) "promise to repay principal and interest or give other return on investment", I .e. inducement;

(III) "absorbing funds from unspecified objects", I .e. sociality.

Manifests of Illegal Fund-raising

(I) the establishment of Internet enterprises, investment and investment consulting enterprises, various trading venues or platforms, farmers' professional cooperatives, mutual fund organizations and other organizations to absorb funds;

(II) absorb funds in the name of issuing or transferring equity, creditor's rights, raising funds, selling insurance products, or engaging in various types of asset management, virtual currency, financial leasing business, etc;

The (III) absorbs funds in the form of promises to pay returns in currency, equity, in kind, etc. in commercial activities such as selling goods, providing services, investment projects, etc;

(IV), in violation of laws, administrative regulations or relevant State regulations, publicly disseminate information on the absorption of funds through the mass media, instant messaging tools or other means;

(V) other suspected illegal fund-raising activities.

Four common methods of illegal fund-raising

(I) promise high returns. Criminals make up the myth of "pie in the sky" and "become rich overnight", promising investors high returns. In order to defraud more people to participate in fund-raising, illegal fund-raisers often fulfill their promises in full and on time at the beginning of fund-raising, and when the fund-raising reaches a certain scale, they secretly transfer funds or abscond with money, causing fund-raising participants to suffer economic losses.

(II) fabricated false projects. Most criminals use registered legal companies or enterprises, under the guise of responding to national industrial policies and carrying out entrepreneurship and innovation, to fabricate various false projects, and some even organize free tours and inspections to defraud the public's trust.

(III) use false propaganda to build momentum. Criminals often spend a lot of money on propaganda, hiring celebrity endorsements, celebrity platforms, publishing advertisements in major radio, television, Internet and other media, publishing interview articles in famous newspapers, hiring people to widely distribute leaflets, and making social donations. Make false momentum.

(IV) is the use of affection to lure. Some illegal fund-raising participants, in order to complete or increase their own performance, sometimes take the method of pyramid selling, do not hesitate to use family and geographical relations, fabricate their own high returns of lies, to attract relatives, classmates or neighbors to join, so that the participants spread rapidly, the scale of fund-raising continues to expand.

Common Routine of Illegal Fund-raising

Illegal fund-raising criminals in order to lure the masses to achieve the purpose of illegal fund-raising, usually take the following means to win the trust of the masses.

(I) decorate the company's facade and create the illusion of strength. Illegal elements often set up companies, for business license, tax registration and other procedures, seemingly legal, but in fact there is no financial qualification. These companies either have high-end and luxurious office locations, or publicize the background of state-owned assets, or invest heavily in packaging and publicity through various media or even CCTV, or hold promotion meetings and knowledge lectures in high-end places (such as the Great Hall of the People), and invite celebrities, scholars and officials to stand for momentum, show photos with leaders and various awards, which are more deceptive.

(III) fabricated investment projects to dispel the public's misgivings. From the past agricultural, forestry and mining development, private lending, real estate sales, original share issuance, franchise operations and other forms of gradual upgrading and packaging to investment and wealth management, wealth management, financial mutual financial management, overseas listing, private equity and other financial management projects, and the commitment to guarantee, Can be bought back, low risk, high return, etc.

(IV) confuse the concept of investment and increase the difficulty of identification. Criminals have trumpeted listing in local equity trading centers and confused listing in the US OTCBB market with listing on Nasdaq. Some use new terms such as electronic gold, investment funds and online foreign exchange speculation to confuse the masses and falsely claim new investment tools or financial products. Some use monopoly, agency, franchise chain, consumer value-added rebate, e-commerce and other new business methods to deceive the masses into investing.

(V) promise high returns and make up the myth of getting rich. High-interest seduction is the only way for all fraud criminals to deceive the masses. At first, the lawbreakers paid the principal and interest of the early investors in full and on time, then demolished the east wall to make up for the west wall, and used the money of later people to cash the previous principal and interest. After reaching a certain scale, they secretly transferred funds and absconded with the money.

Prevention of illegal fund-raising "four see think twice and wait for a night" method.

4 look. A look at the legality of financing, in addition to whether to obtain a business license, but also to see whether to obtain the relevant financial license or approved by the financial management department. Second, look at the content of the publicity, to see whether the publicity contains or implies "guaranteed, risk-free, high-yield, stable profit without loss" and other content. Third, look at the business model, whether there are physical projects, the authenticity of the project, the direction of capital investment, the way to obtain profits, etc. Fourth, look at whether the participants in fund-raising are mainly for specific groups such as the elderly.

Think twice. Think about whether you really understand the product and the market. Second, think whether the product conforms to the market law. Think twice about whether your own economic strength has the ability to resist risks.

Wait one night. When encountering relevant investment and fund-raising publicity, you must avoid being hot-headed, first seek the opinions of family and friends, and delay one night before making a decision. Don't blindly believe in publicity, acquaintance introduction, expert recommendation, and don't be tempted to invest blindly by high profits.

Contribution: Secretariat of the Board of Directors and Supervisors