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Tuesday, May 17, 2011

SEC CRACKING DOWN (finally??) on Foreign Shell Cos.

SEC CRACKING DOWN (finally??) on Foreign Shell Cos.

"While the Securities and Exchange Commission has recently stepped up its enforcement efforts against allegedly fraudulent U.S. shell companies in greater China, those efforts aren't limited to that region, according to James Kroeker, the SEC's chief accountant.
Speaking at last week's Zicklin Center Financial Reporting Conference at Baruch College in New York City, Kroeker did not mention China by name. He said that "while there are a number of [reverse-merger stories] from a particular country that have grabbed headlines recently, the problems coming to the forefront are not limited to companies based in any geographic region."
Still, it was clear that the headline-grabbing nation was China. In an April 27 letter to a House Oversight and Government Reform subcommittee, SEC chair Mary Schapiro reported that in the prior five weeks, the commission had suspended trading in at least three 
China-based entities (Heli Electronics, China Changjiang Mining & Energy, and Rino International) that had become U.S. domestic issuers through reverse mergers. The SEC also revoked the U.S. registrations of at least eight other such companies "in the last several months alone," she stated."

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