Chinese reverse mergers on the SEC’s radar

The Securities and Exchange Commission won’t confirm or deny the probe, according to The But it’s widely believed that the agency is looking into the ways that Chinese and Americans work together to exploit weaknesses in both countries’ regulatory schemes.  with a particular focus on companies that go public through reverse mergers (a frequent topic of investigation at Sharesleuth). A highlight from today’s story: “In some quarters, China-based stocks are now discussed with near scorn. Famed hedge-fund manager Jim Chanos, who uncovered the accounting fraud at Enron nearly a decade ago, says that accounting irregularities are more the norm than the exception at the Chinese companies researched by his firm.” 

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