There are countless ways to invest; besides the stock market, many relatives and friends also introduce various investment opportunities. According to lawyers' experience, investments that steadily profit typically do not pose a problem, but when investments incur losses or fail to yield returns as expected, disputes arise. At this time, in addition to civil claims based on contractual relationships, it is common to file criminal fraud charges depending on the case. When there are many investors, there might also be charges of 'illegal fundraising under the Banking Law,' but what does that mean exactly?

Banking Law Regulations

According to Banking Law Article 29, Paragraph 1: 'Unless otherwise specified by law, non-banks shall not engage in the acceptance of deposits, the entrusted management of trust funds, public property, or the conduct of domestic and foreign exchange business.' To maintain financial order, the law stipulates that only legally licensed banks can operate banking businesses, and only banks are allowed to 'accept deposits.' As the socio-economic landscape evolves, legislators have found that some underground companies use 'investment' as a pretense to actually 'accept deposits.' Therefore, for those who engage in activities under the guise of investment, attracting an unspecified group of people with promises of high returns, the 'Quasi-Acceptance of Deposits' regulation has been established.

The subjective intent behind violating the Banking Law - Illegal Fundraising Crime

Do these friends and relatives who share investment information immediately get deemed by the court as violators of the Banking Law? Our courts believe it's essential to distinguish between two types of sharers: the first type includes those who recruit investors from the standpoint of business operators; the second type consists of those who are merely sharing investment information from an investor's standpoint. If it's the former, they are deemed to have a criminal intent to violate the Banking Law, potentially constituting an illegal fundraising crime. If it's the latter, since the sharing is merely informational, there is no criminal intent to violate the Banking Law, and thus, it should not be considered a crime.

It's important to note that the distinction between the two does not depend on whether the sharer 'receives compensation' or 'commissions.' The court believes it's necessary to look at whether there is repeated business conduct and profit-making to determine this. The following two judgments can be referred to:

1. Taiwan High Court's 107th year, Gold Appeal Nos. 54 and 55 Criminal Judgment:
   'The person must have an understanding of the elements constituting the offense to be deemed to have the subjective intent of violating Banking Law Article 29, Paragraph 1. Even if there is behavior that assists others in soliciting investments, it should be regarded as operating jointly with business operators, standing from the company's perspective to solicit investments from an unspecified number of people; or standing from an investor's standpoint, whether based on the mentality of sharing profitable information or earning the promised commission from the company, to introduce other investors to the investment. For the former, since the person and the business operators both have the understanding of jointly managing the deposit-accepting business, they possess the intentional violation of Banking Law Article 29, Paragraph 1. As for the latter, because the person stands in opposition to the company, i.e., from an investor's standpoint, introducing relatives and friends to invest to share the benefits promised by the company or to secure the promised commission for themselves, they lack the intent to jointly operate the deposit-accepting business and thus do not have the subjective intent of violating Banking Law Article 29, Paragraph 1.'
    

2. Taiwan High Court Kaohsiung Branch's 109th year, Gold Appeal Heavy No. 4 Criminal Judgment:
   'The differentiation between having an investment role and jointly operating an illegal banking business: If a person, through a fundraising scheme, continuously and repeatedly solicits funds from a large number of people or unspecified individuals for profit, they are deemed to have a profit motive. The so-called profit motive refers to gaining benefits through the solicited or absorbed funds. For those who have invested in fundraising schemes, if their intention is merely to transmit shared investment information, express investment thoughts, or confirm investment procedures and profit distribution for other investors, it is merely helping the investment. If the intention is to make a profit and based on a criminal intent connected with those operating the illegal banking business, acting to collect investment amounts, promote investment information, or distribute interests to investors, then it is considered as jointly operating an illegal banking business. The main distinction between the two still lies in the presence or absence of a profit motive.'

Therefore, if the court believes the sharing is 'based on the position of an investor,' then there is no intentional wrongdoing, and it does not constitute a crime under the Banking Law. Conversely, if the court finds that 'solicitation is based on the standpoint of business operations,' it considers there to be a criminal intent of illegal fundraising, thus constituting a crime. Whether it's the former or latter, and whether there is subjective intent, will depend on the specific details of the case. If your friends or relatives encounter similar issues, it's also recommended to seek professional legal advice and assistance.