1. Lack of legal qualification: fund-raising companies must obtain corresponding legal approval or registration before they can raise funds from the public. However, Lushangtong failed to obtain legal fund-raising qualification in the course of operation, which belongs to unlicensed or ultra vires operation.

2. Failure to pay on time: Lushangtong failed to return the principal and interest to investors at the agreed time and amount, which caused some investors to suffer property losses. This behavior violates the basic rules of the financial market.