Thoughts on SEC’s Trading Suspension of Pink Sheet Shells 2

As noted below, yesterday the SEC suspended trading for 10 days in 379 shell companies which are non-reporting. All are presumably trading on the platforms of OTC Markets and it appears most did not respond to SEC inquiries for information and the like. These companies will not be able to trade again until they make ...

My Thoughts on the JOBS Bill

As the House gets ready to vote on final passage of the slightly amended Jumpstart Our Business Startups (JOBS) bill this week, following various summaries of the bill I thought I would share a few ruminations on what is good and maybe a little less good in the bill. As we know SEC Chairman Mary ...

Highlights from M&A Conference

I spent some time today at the 2011 International M&A Summit put together by the M&A Advisor. Here are some tidbits about the current M&A environment that came out of the panels: 1. There was a dramatic slowdown in deal activity in the last 30-60 days due to market conditions. 2. Corporations with cash are still ...

Don’t Trash Our Sector…Please

Several recent statements by prominent regulators, as well as scathing press articles, primarily talking about the problem with Chinese reverse mergers, have decided to declare that because of the challenges in China, reverse mergers in general are bad. I”m not enjoying this time travel back to the mid-1990s when no major investment bank would raise ...

If You Throw Enough Mud(dy Waters) at Chinese Companies, Will Some Stick?

The newest Reverse Merger Report continues to focus on the series of complaints and class actions against Chinese companies in a number of cases driven by research firm Muddy Waters Research. In at least two instances, Muddy Waters issued negative reports about Chinese companies while also admitting they may be shorting the stock (ie betting ...

Good Meeting At SEC About “Evergreen” and Rule 144(i)

As I head back to NY on a rainy Thursday morning, I want to report that I had a very good meeting with SEC staffers concerning Rule 144(i) yesterday.  As we know, this rule, implemented in 2008, among other things provides that anyone seeking to sell shares that are not registered with the SEC under ...

Tip of the Week: Building a Shareholder Base

I write from the Amtrak train heading to Washington for meetings at the SEC. Gives me a few minutes to catch up with you guys!  I also want to thank all those who sent good wishes on my transition to Richardson & Patel, which has been going great. Now on to our tip of the ...

China’s Circular 698 – Whither “Slow Walk”?

In the new edition of my book, half the chapter on China goes through the various regulatory actions taken by the PRC government that have affected the approach taken in reverse mergers of Chinese companies. In the past, structures have been developed to ameliorate the impact of regulations or decrees that initially seem extremely problematic. So it may ...

Flash! Rodman Buying OTCBB

It just came over the wire – Well known investment bank Rodman & Renshaw announced that it has signed a letter of intent with the Financial Industry Regulatory Authority (FINRA) to buy the assets of the OTC Bulletin Board. FINRA had announced awhile back its intent to sell, and at the recent Reverse Merger Conference ...

Tip of the Week: What's Customary? Nothing!

Often in reverse mergers we are asked what is customary with respect to valuation, indemnification, personal guaranties, representations and warranties and the like. The answer, unfortunately, is that every deal is different. Every investment banking firm is different. Every shell promoter is different. In 25 years of practicing law, where in, say private equity or ...