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Chinese Companies to US Markets in Reverse Takeovers: Ripe With Fraud

Guest ValueCarl

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Guest ValueCarl

SEC has also started focusing on individual Chinese companies for accounting violations and lax auditing practices.


"...The House financial-services committee is also revving into gear and may hold hearings on Chinese-company accounting in 2011... The committee's fear is that some companies are rife with self-dealing and potential fraud and weak international standards have let it go largely undetected," the report noted.




The report cites investment bank Roth Capital Partners in measuring the reverse merger market size: 94 companies trading an average of 50,000 shares per day with a total market value of $20 billion.

These companies trade on U.S. stock exchanges, but because their principle assets remain in China they are regulated by Chinese laws outside the domain of the SEC.


Read more: http://www.benzinga.com/news/11/01/778739/bloomberg-businessweek-calls-attention-to-chinese-reverse-merger-frauds#ixzz1BosMY931

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