First of all, let's describe this problem from the perspective of the whole society. There are only two kinds of financial company scams, one is Ponzi scheme, and the other is pure fraud, both of which are scams, but the specific methods and time of fraud are different.

Ponzi scheme has many names, specifically, it takes the pyramid as the model, and the top people benefit, and the profit model is to keep pulling the new and returning the old until.

For example, although the private Jiuding family is huge, it has not established any so-called industrial advantages and financial advantages, and it has not been able to control every field it enters very well-such as sufficient cash flow, low debt ratio, efficient team and refined management.

the return on financing varies greatly, and the cost of capital is too high, which makes the private Jiuding family overwhelmed; Mutual guarantee among its subsidiaries, like an invisible ring lock, is diversified with high leverage, which greatly enlarges the risk.

for leveraged financing, the core lies in good cash flow, which is used to repay debts, followed by net profit and then sales revenue. However, in order to raise and maintain the stock price, the private Jiuding family should improve the company's profits.

The family gave up the planning of cash flow, and only considered the convenience of refinancing. An ID card with a quota of 6 million became a tool for "swindlers" to collect money. Most of the "borrowers" became a mystery, and the whereabouts of the funds were unknown.

in order to maintain the share price of Jiuding Group (43719) and Jiuding Investment (653.SH), it is necessary to improve the net profit and earnings per share level.

If related party transactions and performance fraud are not considered, under normal circumstances, there are only two ways to increase profits.

The first is to increase the gross profit margin and net interest rate through the management level of the company under the premise of a certain sales income;

the second is to increase sales revenue and even net profit through scale expansion. After the private Jiuding family entered the company, the profit margins of the two listed companies fell instead of rising? In the case that the gross profit margin and net interest rate can't be improved,

Private Jiuding family can only improve its profit level by increasing its scale, which requires a steady stream of capital investment, so there is a vicious circle:

Private Jiuding family, which relies on highly leveraged acquisition, should have relied on strong cash flow to repay its debts, but in order to make profits, the private Jiuding family has invested more and more capital and the debt ratio is getting higher and higher.

In the early days, when the Jiuding family had strong financing ability, this model could barely be maintained. However, when the financing environment changed, Jiuding immediately became vulnerable and even resorted to illegal means such as hollowing out listed companies.

If I don't understand telling you a story, I believe I will understand.

A beggar came to the market to beg. At first, not many people gave him money. The beggar thought of a way and put up a sign saying that as long as everyone gave me 1 yuan, I would give everyone 1, yuan a month later.

When everyone saw it was quite good, they gave him 1 yuan. At first, the beggar really cashed it every time.

The beggar gradually received more and more money, and he still kept his promise. Everyone believed him more and more. The beggar gradually became the richest man in the city, became famous, and more people went to give him money.

But until one day, all of a sudden, everyone couldn't get the money. They thought that the new "richest man" had forgotten the date to give them money, and everyone looked for him one after another. This story is a typical Ponzi scheme. It's hard to say how long it can last, but it's a matter of time before it collapses.

Cheat by various means, no matter whether he is really cheating or not, as long as he cheats you, it is very difficult for you to sue. Since investment is voluntary, do you think people who recommend buying stock funds will be responsible if they lose money? No, theory and law are not needed. Why? People only give advice, but they don't force you to invest. How to prosecute?

So why are there more and more fraudulent financial companies now, and how do they make profits? It's not the same problem at all. So the corresponding answer is different.