Can Seasoning Restrictions Be Adjusted?

I remain determined in my quest for the major stock exchanges to consider some alterations to the reverse merger “seasoning” requirements instituted in November 2011.  As we know, these restrictions were added primarily in response to allegations of fraud in a number of Chinese companies that went public through reverse mergers. The rules add a ...

Big Award in Chinese Reverse Merger Case

In what appears to be the first actual judgment in the several dozen cases involving allegations of impropriety in cases of Chinese companies that went public in the US, a $77 million arbitration award was granted to a plaintiff in an arbitration case in Hong Kong. AIG CEO Hank Greenberg’s C.V. Starr & Co. sued the founding shareholders ...

Flash: SEC Charges Top CPA Firms with Securities Violations re China 1

The Securities and Exchange Commission today announced that it is charging affiliates of the “big four” accounting firms (as well as BDO) with securities violations for failing to turn over work papers regarding audits they conducted of Chinese companies owned by US public companies. The SEC and the Public Company Accounting Oversight Board (PCAOB), which ...

Highlights from SEC Small Business Conference Part II

Here are more take-aways from today’s SEC conference. 1. Many are asking for the SEC to try to provide a “safe harbor” that’s nonexclusive to ensure that a company has verified an investor’s accredited status if the company chooses to advertise or generally solicit for investors as will soon be permitted thanks to JOBS. 2. ...

PCAOB Starts Observation of Chinese Audits

Reuters and The Reverse Merger Wire are reporting that the Public Company Accounting Oversight Board (PCAOB), which regulates auditors of US public companies, has gone through its first round of observations of Chinese regulators’ reviews of auditors in China. For several years the Chinese regulators were not permitting any observation or review of Chinese auditors ...

PCAOB-China In Tentative Agreement on Auditor Inspections

Reuters reported yesterday that, as anticipated since this summer (see http://bit.ly/OP8W2H), the Chinese government and the US Public Company Accounting Oversight Board (PCAOB) have reached a “tentative agreement” to allow US inspectors to observe Chinese audits on China-based accounting firms who audit US public companies. The current tentative deal allows US observation but does not ...

Reverse Mergers Plunge

The latest DealFlow Report informs us that only 27 reverse mergers were completed in the second quarter of 2011. That’s the lowest in a quarter since around 2004, and back then the method for counting transactions was much more uncertain. Only five of the 27 deals involved a financing, and the five deals raised a ...

BATS Joins Other Senior Exchanges with Reverse Merger Seasoning

Another national exchange has weighed in. The BATS Exchange, which is only now going to start listing company stocks (currently it is just a trading venue), has proposed to the SEC that they mirror the New York Stock Exchange, NYSE AMEX and Nasdaq in requiring companies that complete reverse mergers with SEC reporting shell companies ...

PCAOB and China Close to Deal on Inspections

A Shanghai newspaper has reported that it is now expected that the US Public Accounting Oversight Board (PCAOB) and Chinese officials will have a deal by the end of the year to allow joint inspections of China-based auditors who audit US public companies. This according to the latest DealFlow Report. There has been a stalemate for ...

Reverse Merger Conference This Week

I hope to see many of you this Tuesday at the annual Reverse Merger Conference put on by DealFlow Media. If you’re not signed up yet go to www.dealflow.com. What will be the mood at the conference? I am guessing a mixed bag. We are not where we were in 2009 and 2010 during the ...