Illegal behavior of private placement products: 1, illegal fund-raising behavior. Raising funds from unqualified investors, lowering the threshold of investors in disguise, publicly raising funds from unspecified objects, exaggerating or falsely propagating, illegally protecting capital and income, and the number of investors exceeds the quorum limit. 2. The investment operation is illegal. Misappropriation, embezzlement of the fund property, misappropriation of the inherent property of the fund, collection of fees in violation of the contract, transfer of benefits, etc.

Legal objectivity:

Interim Measures for the Supervision and Administration of Private Investment Funds Article 2 The term private investment funds as mentioned in these Measures (hereinafter referred to as private investment funds) refers to the investment funds raised from investors through private placement within the territory of People's Republic of China (PRC). The investment of private equity fund property includes buying and selling stocks, equity, bonds, futures, options, fund shares and other investment targets agreed in investment contracts. These Measures shall apply to the registration, fund raising and investment operation of companies or partnerships established for the purpose of investing in private equity funds and assets managed by fund managers or general partners. These Measures shall apply to securities companies, fund management companies, futures companies and their subsidiaries engaged in private equity fund business. Where other laws and regulations and the relevant provisions of China Securities Regulatory Commission (hereinafter referred to as China Securities Regulatory Commission) provide otherwise for the above-mentioned institutions to engage in private equity fund business, such provisions shall apply.