The Causes And Prevention Of PE Capital-Raising Fraud Crimes

In recent years,there are many fund-raising fraud cases frequent appeared,which is using the stunt of private equity funds by the most popular financial product.With the frequently occurring of this type of crime,there are some irreparable economic loss to the victim.Over time,it will also disrupt domestic capital market,and damage the long-term development of the socialist market economy.The type of PE fund-raising fraud crime refers to the action of illegal fund-raising through publicity,by the way of signing a investment and financing contract to promise fixed returns,in the legal form of private-equity firms,for the purpose of illegal possession.The characteristics of PE fund-raising fraud crime is using the legal form of PE to cover the illegal purpose of fund-raising fraud,and using the means of MLM to enlarge the scope of the fraud rapidly,following the skill of “Ponzi scheme”.There are some points of view to study synthetically for the reasons of PE fund-raising fraud crime.For example,the society,the mentality,the natural environment,and so on.While,the most important reasons are these what are financial reform system is not perfect,financial regulation is not in place and the investment of private capital is blind.First,the capital market of raising the stock right develops flourishing with the favourable environment of financial reform.But as the one of most important reason what financial reform system is not perfect is the fuse of PE fund-raising fraud crime: The registered capital of $0 leads to the math of the false PE fund-raising fraud crime;The deficiency of fund supervision leads to the PE fund-raising fraud crime becoming the proficient;And it is confused because of there is no need to the fund investors.Second,there is a connection between the reason for PE fund-raising fraud crime occurs frequently with a unsystematic and imperfect system of supervision and management in the private equity capital market.At present,it doesn't exist any laws to regulate PE investment,the manage of PE organization in chaos,its own supervision is slack,and all sorts of supervision are imperfect.Third,with the development of economy,the wealth of enterprises and individuals accumulating gradually,but the type of investment is monotonous,the channel of investment is single,and it is short of attraction in the current financial market.The most of people have backward financing concepts,and a poor ability in financial management,so a lot of people participate in fund-raising follow the trend,in the temptation of high interest rates and a fluke mind.As a special form of expression in illegal fund-raising cases in new period,PE capital-raising fraud crimes could result in great confusion and harms.It is need to take corresponding measures to prevent PE capital-raising fraud crimes by its crime characteristics and crime causes as an origin,perfect reform of financial system,speed up the pace of PE legislation,complete supervisory system,guide investment behavior.Only by perfecting and remdying can contain the bad ambiance timely that carrying on fraudulent fund-raising in virtue of PE financial reform,accordingly guarantee the reform of financial system can go with a swing,and protect the property safety of people.