Recently, the stock market has been fluctuating greatly due to the policies of U.S. President Trump, with significant daily volatility. Meanwhile, many investment firms, advisory companies, and professional traders are recruiting investment consulting members, with some even offering direct account management services. During times of extreme market fluctuations, investors often fall victim to the advice and actions of so-called "professional traders," ultimately losing all their invested capital. This article will explore the legal risks associated with illegal proxy operations and illegal investment consulting, helping investors avoid potential pitfalls.

What is illegal proxy operation?

"Illegal proxy operation," also known as account management on behalf of others, refers to the act of executing investments or stock trades on behalf of others without the authorization of the regulatory authorities. According to the Securities Investment Trust and Consulting Act and other relevant regulations, legal account management on behalf of others must be carried out by legitimate institutions (such as investment trust or advisory companies) that have obtained a full authorization investment business license from the Financial Supervisory Commission (FSC). Otherwise, it is considered illegal.

What is illegal investment consulting?

"Illegal investment consulting" refers to providing stock analysis opinions or investment recommendations to others without authorization from the regulatory authorities, and charging fees from others or third parties. It is important to note that providing general securities investment information (such as statistics on the trading amounts of the three major institutional investors or rankings of institutional buy/sell) without directly or indirectly engaging in individual stock analysis or recommendations is not subject to penalties.

Possible legal liabilities of illegal proxy operations and illegal investment consulting

1. Criminal liability

Article 107 of the Securities Investment Trust and Consulting Act：Any person who engages in any of the following actions shall be subject to imprisonment for up to five years and a fine of not less than NT$1 million and not more than NT$50 million: 1. Operating securities investment trust business, securities investment consulting business, full authorization investment business, or other businesses that require approval from the regulatory authorities without authorization.

2. Civil liability

If an investor suffers damages due to illegal proxy operations or investment consulting, they may claim compensation for damages in accordance with Article 184 of the Civil Code.

Common illegal proxy operations and investment consulting techniques and risks

• Recommending hot stocks in LINE groups or social media, claiming "guaranteed profit" and encouraging people to join as members.

• Impersonating legitimate investment consultants, financial experts, or professional traders, and privately charging fees for trading services.

Illegal proxy operations and investment consulting are not only extremely risky but may also involve criminal and civil liabilities. Investors should choose legal and compliant channels and avoid falling for online "guaranteed profit" claims to prevent falling into illegal traps. If you suspect that you have encountered illegal proxy operations or investment consulting, it is recommended to seek professional legal advice immediately to protect your rights!

>Consult Now