⚖️ The Crime of Investment of Funds Under Law No. 146 of 1988 and the Latest Court of Cassation Rulings
Some financial investment transactions may initially appear to be ordinary financial agreements. However, the nature of the transaction, the way funds are received, and the purpose for which they are received may make the case subject to specific legal provisions. This highlights the importance of understanding the crime of investment of funds under Egyptian law and the regulations established by the legislator regarding receiving funds from the public for the purpose of investing or utilizing them.
The crime of investment of funds is one of the offenses to which the Egyptian legislator has given particular attention because of its potential impact on citizens' funds, economic stability, and confidence in investment activities. Therefore, Law No. 146 of 1988 concerning companies operating in the field of receiving funds for investment was enacted, establishing specific regulations for receiving funds from the public for the purpose of investing or utilizing them.
📞 Contact Information for Counselor Mohamed Mabrouk
📍 Address: Seventh District – 6th of October City
📞 Phone: 01055144010
In this context, Counselor Mohamed Mabrouk explains the most important legal rules and provisions related to the crime of investment of funds, as well as the position of the Egyptian Court of Cassation regarding the elements of the crime and the concept of receiving funds from the public.
⚖️ What Is the Crime of Investment of Funds?
Within the scope of Law No. 146 of 1988, the crime of investment of funds refers to receiving funds from the public for the purpose of investing, utilizing, or participating with them in violation of the regulations and conditions established by law.
The legislator has prohibited companies that do not meet the legally prescribed form and registration requirements from receiving funds from the public, regardless of the currency, method, or designation used for this purpose.
This regulation aims to prevent the misuse of citizens' savings without legal supervision, protect fund owners from unlawful practices, and protect the national economy from the consequences of unauthorized investment activities.
📚 What Does Law No. 146 of 1988 Provide?
The law regulates the activity of receiving funds from the public for the purpose of investing or utilizing them and restricts the practice of this activity to entities that meet the legally prescribed requirements.
The basic principle is that merely establishing a commercial activity or company does not automatically grant its owner the right to collect funds from the public for investment purposes. The legal framework, licenses, and restrictions established by the legislator must be observed.
The Court of Cassation has clarified that the legislator intended through this law to regulate an economic activity of significant importance because of its impact on the economic and social system and the protection of citizens' funds and savings.
👥 When Does the Term "Public" Apply in an Investment of Funds Crime?
One of the most important issues addressed by the Court of Cassation is determining what is meant by receiving funds from the "public."
The Court of Cassation has established that the public refers to persons from whom funds are received without distinction and without a special relationship connecting them to the recipient of the funds, so that the activity is open to an unspecified number of persons.
Accordingly, the determining factor is not merely the number of persons who provided their funds, but rather how the activity was presented, the nature of the persons from whom the funds were received, and whether the receipt of funds was open to an unspecified public.
📢 Is Direct Advertising Required for Receiving Funds from the Public?
It is not necessarily required that an invitation to the public take one specific form.
Judicial rulings have addressed various forms of promoting investment activities, including advertisements, seminars, conferences, social media, and the internet, whenever it is established that the activity was directed toward a public consisting of persons who were not predetermined.
In a relatively recent ruling, an economic court addressed a case involving promotion through social media and electronic means and applied the principles of Law No. 146 of 1988 concerning receiving funds from the public for the purpose of investing or utilizing them.
🧾 Elements of the Crime of Investment of Funds
The crime of receiving funds for investment or utilization in violation of the law is based on a number of elements that must be verified in the case under investigation.
The most important elements include:
First: Receiving Funds from the Public
The funds must have been received from a group of persons constituting the public in accordance with the definition established by law and the Court of Cassation.
Second: The Purpose of Receiving the Funds Must Be Investment, Utilization, or Participation
Merely receiving money is not sufficient. The receipt of the funds must be connected to the purpose specified by law.
Third: Violation of Legal Regulations
The activity must be carried out by an entity that is not legally authorized to conduct such activity or in violation of the regulations established by the legislator.
Fourth: Failure to Return the Funds – Where the Elements of This Offense Are Established
Court of Cassation rulings have also addressed the offense of failing to return amounts owed to their owners as an independent offense with its own elements that must be established in the judgment.
⚖️ The Position of the Court of Cassation on Proving the Crime of Investment of Funds
The Court of Cassation has confirmed that the law does not require a specific method of evidence to establish the crime of receiving funds from the public for investment or utilization in violation of the law.
The court may rely on evidence and circumstantial evidence that it finds convincing, provided that such evidence is sufficient and legally sound to establish the facts and elements of the offense.
The Court of Cassation has also ruled in one of its judgments that the court is not required to address the criminal intent separately when the facts and circumstances stated in the judgment demonstrate its existence.
💰 Penalty for Receiving Funds in Violation of the Law
Law No. 146 of 1988 provides penalties for receiving funds in violation of its provisions, as well as for failing to return amounts owed to their owners, including the return of the amounts due in accordance with the circumstances established by law.
The law also provides specific regulations concerning the effect of returning funds during the stages of investigation and trial, including provisions concerning the termination of criminal proceedings or exemption from punishment subject to the conditions and deadlines established by law.
The Court of Cassation has confirmed in one of its rulings the legal effect of returning funds and reaching a settlement before the final judgment in accordance with the conditions stipulated by law.
❓ Does Every Agreement to Invest Funds Constitute an Investment of Funds Crime?
Not every financial transaction or private agreement to invest funds automatically falls under the provisions governing the crime of receiving funds from the public.
The Court of Cassation has emphasized the importance of determining whether the term "public" applies and whether the funds were received from unspecified persons without a special relationship, or whether the matter was limited to private agreements between specific individuals connected by a particular relationship.
Therefore, determining the legal characterization of the case requires examining the details of the transaction, the method of collecting the funds, the number of persons involved, the nature of the relationship between them and the recipient of the funds, and the purpose for which the funds were received.
👨⚖️ The Importance of Consulting a Specialized Lawyer in Investment of Funds Cases
Investment of funds cases require a detailed examination of the facts, documents, method of receiving funds, and nature of the relationship between the parties, in addition to identifying the applicable legal provisions and relevant Court of Cassation rulings.
Therefore, consulting a specialized lawyer can help examine the elements of the accusation, review the evidence in the case, determine whether the elements of the crime are present, and present the appropriate legal defenses according to the circumstances of each case.
📍 Counselor Mohamed Mabrouk
If you are looking for a lawyer in Egypt to handle a case involving investment of funds, receiving funds from the public, or other criminal and economic cases, you can contact Counselor Mohamed Mabrouk to obtain appropriate legal consultation and have the details of your case reviewed in accordance with Egyptian law.
Phone Number: 01055144010
📝 Conclusion
Law No. 146 of 1988 represents an important legal framework for regulating the activity of receiving funds from the public for the purpose of investment or utilization, helping protect citizens' funds and limiting the practice of such activities outside the legal framework.
The rulings of the Court of Cassation have also emphasized the importance of determining whether the term public applies, examining the nature of the process of receiving funds and its purpose, and determining the extent to which the legal rules have been violated, with the legal characterization and penalty varying according to the circumstances of each case.
Therefore, dealing with the crime of investment of funds under Law No. 146 of 1988 requires a careful legal examination of the facts, evidence, and relevant judicial rulings.
For consultation and contact with Counselor Mohamed Mabrouk:
📍 Seventh District – 6th of October City
