Concerned about investors, working together

                  May 15, 2022, is the fourth "5·15 National Investor Protection Publicity Day." The theme of this year's event is "Caring for Investors and Working Together - Building a Solid Foundation for the Registration System Reform and Protecting the Legitimate Rights and Interests of Investors."
To further promote a culture of rational investment and earnestly safeguard the legitimate rights and interests of investors, the China Securities Regulatory Commission has decided to designate May 15 of each year as "National Investor Protection Publicity Day." It will organize and mobilize all parties across the country to actively carry out various forms of investor protection activities, so that the concept of investor protection will be deeply rooted in the hearts of the people and become everyone's conscious action.
By establishing a "National Investor Protection Publicity Day," a long-term mechanism for investor protection work will be established, led and promoted by regulatory authorities, with the linkage of relevant departments, the active fulfillment of responsibilities by the industry, and the active participation of the public. This will further enhance the penetration, radiation, and influence of investor protection, create a healthier, more harmonious, and fairer capital market ecosystem, and help build a standardized, transparent, open, dynamic, and resilient capital market.

In order to actively respond to the call of the China Securities Regulatory Commission and spread the concept of investor protection, Lianke Technology would like to remind investors to pay attention to the ten traps of illegal securities and futures activities:

1. Fabricating "Stock God" Myths to Obtain Membership Fees

      Unlawful elements use internet tools or platforms such as WeChat, Weibo, online live broadcast rooms, forums, stock bars, and QQ to solicit members or clients with exaggerated promotional terms such as "big data stock diagnosis," "recommendation of dark horse stocks," "one-on-one expert guidance," and "no charge without profit," or by touting past stock trading "performance." After investors join, "teachers," "experts," or "stock gods" illegally recommend stocks to investors in the name of imparting stock trading experience and training stock trading skills, in order to seek "reward fees," "training fees," or collect profit sharing. There are also unlawful elements who first recommend stocks for free, and then take the opportunity to invite investors to join "internal VIP groups," claiming to provide more high-end services and charge high service fees.

2. Inducing Participation in Off-Site配资

      Unlawful elements create off-site 配资 websites, mobile APPs, WeChat official accounts, etc., to carry out publicity, and induce investors to open accounts, deposit funds, and provide 配资 support with gimmicks such as "You trade stocks, I pay," "Leveraged stock trading, high profits," "Real trading, low threshold," and "Safe funds, fast withdrawals." The accounts opened are mostly sub-accounts of sub-account software, which can be controlled by 配资 intermediaries. Situations such as software cannot be logged in, 配资 intermediaries lose contact, and funds cannot be withdrawn are common. Off-site 配资 platforms do not have securities business qualifications and are suspected of illegal business operations or fraud.

3. Luring Investors to Take Over at High Prices

      Unlawful elements build positions in advance, and when selling, they unite with so-called stock market "big Vs," "stock gods," and "experts" to attract investors to stock trading exchange groups and stock recommendation live broadcast rooms with gimmicks such as insider information and following the dealer to make money. After gaining the trust of investors, they use rhetoric such as "insider stocks will have big moves," "a certain hot money has arrived," and "10,000 people jointly build positions to make money together" to lure investors to follow the purchase with time limits, price limits, and full positions, which is actually for the dealer to ship and take over. When the stock price plummets and investors question it, the stock trading exchange group and stock recommendation live broadcast room have been closed and disbanded. This model is what is called the "pig butchering盘."

4. 代客理财 Promises Profit Sharing

      Unlawful elements attract investors to cooperate in stock trading in the form of "promised returns," "profit sharing," and "dealer manipulation." They usually dispel investors' concerns by saying that the account and funds are in the investors' own hands, and induce customers to hand over account operating rights and agree to directly replace customers' operations by promising investment returns or no investment losses to customers. In essence, unlawful elements often operate multiple investors' accounts in reverse, and then take separate profit-sharing and ignoring approaches based on investors' profit and loss situations, that is, requiring profit sharing from profitable investors and leaving loss-making investors alone.

5. Pseudo Private Equity Funds Falsely Claim to Have Insider Information

      Unlawful elements take advantage of the fact that most investors do not understand the national conditions of private equity funds, and under the guise of "private equity funds," they claim to have "insider information" and "financial support," fabricate and display "repeatedly recommended" results, and defraud investors of service fees or induce investors to cooperate in investment and share profits. In essence, the so-called "private equity funds" are often just ordinary speculators, and some are even netizens who lack investment experience. The so-called "professional reports" on their websites are often pieced together or pirated articles, or even fabricated rumors.

6. Wearing a Legal Cloak to Obtain Transaction Fees

      Unlawful elements illegally obtain securities investor information, accurately impersonate securities company employees or claim to be well-known financial APPs to call investors, request to add WeChat friends, recommend stock recommendation "teachers," and share stock trading strategies. After adding WeChat friends, unlawful elements gradually guide investors to open futures company accounts and deposit large amounts of money, and induce investors to frequently trade futures varieties. Some institutions also develop their own APPs, and "teachers" give live lectures in the APP. On the surface, the "teacher" neither charges consulting fees nor asks for accounts and passwords, and the attitude is sincere and there is no income, but in fact, they earn considerable transaction fees and other intermediary remuneration from investors' frequent transactions, and do not care about investors' profits and losses. In practice, investors often lose money and leave the market under frequent transactions.

7. Inducing Engagement in Stock and Futures "Foreign Exchange" Transactions

      Unlawful elements claim that they can circumvent regulatory regulations, provide services for trading overseas stocks (mostly US stocks) and trading overseas futures, provide trading software, guide investors to open accounts and deposit funds, and provide financial leverage. The financial leverage is as high as 100 times. In fact, the so-called trading of US stocks and overseas futures is mostly "virtual盘." That is, although the software provided by unlawful elements is connected to overseas stock and futures market data, investors place orders according to the actual market data, but the funds do not enter the relevant US stock exchanges for trading and clearing, but the software calculates profits and losses according to the market data, and investors do not actually obtain relevant equity, and this behavior is suspected of fraud. The final result of the transaction is often that the server is closed overnight, the trading software cannot be opened, or investors encounter a slight decline under high leverage and "爆仓." For a small number of "real盘" transactions, although they actually buy and sell US stocks, this behavior is suspected of illegal business operations, and investors may also suffer losses.

8. Issuing "Original Shares" for Illegal Fundraising

      Unlawful elements fabricate lies about a certain 'high-tech company' or 'internet company' about to be listed domestically or overseas. They openly promote and issue 'original shares' to ordinary investors through WeChat, QQ, telephone, flyers, and promotional meetings. The investment threshold for 'original shares' is usually very low, with investments starting from tens of thousands of yuan. These individuals often tout risk-free investments, claiming that major shareholders will repurchase the 'original shares' at a high price if they fail to list as scheduled. After investors purchase the original shares, the unlawful elements either disappear or avoid listing for various reasons.

     9. Engaging in illegal futures activities disguised as commodities

      Unlawful elements use local exchange platforms, relying on spot commodities, using standardized contract bidding, electronic matching, T+0, daily mark-to-market, leverage, margin, and forced liquidation trading methods, with the profit model of collecting handling fees to carry out illegal futures activities. These individuals often develop 'market makers' to outsource trading varieties and businesses. Market makers continue to develop agents, jointly marketing publicly through the Internet, WeChat, telephone, and other methods. They often provide 'correct information' first, inducing customers to increase investment with small profits, and then provide false market information, reversing the manipulation of prices, causing investors to suffer significant losses. Market makers and platforms divide the investors' losses according to a certain percentage.

     10. Fraudulently claiming to recruit traders

      Unlawful elements frequently post advertisements for traders and operators on recruitment websites in the name of investment management companies or asset management companies, touting that they can earn over ten thousand yuan a month after applying for a job and undergoing training, without requiring academic qualifications or work experience. After social personnel apply for and join the company, the company claims to use a trading system developed by Hong Kong financial companies or Wall Street elites, and shows them profit-making situations to lure them. Afterwards, the company conducts on-the-job training for the staff, opens accounts, and induces the staff to pay for overseas market index transactions. The funds invested by the staff are transferred to the personal account of the person in charge of the company, and the company then disappears.