Congress and SEC Hit Stocks Made in China – WSJ.com

via Congress and SEC Hit Stocks Made in China – WSJ.com. (Google Search Access)

“The Securities and Exchange Commission has begun a crackdown on the practices of the “reverse takeover” market for Chinese listings, according to people with knowledge of the probe. Specifically, the SEC’s enforcement and corporation-finance divisions have begun a wide-scale investigation into how networks of U.S. accountants, lawyers, and bankers have helped bring scores of Chinese companies onto the U.S. stock markets, these people say.

The SEC has also begun homing in on individual Chinese companies for accounting violations and lax auditing practices, these people say, beyond a number of previously announced investigations.

On Tuesday, the SEC filed a case in the area, settling a lawsuit against accounting firm Moore Stephens Wurth Frazer & Torbet LLP and one of its partners for its audits of China Energy, which was listed on Nasdaq in 2005.

Behind the scenes, the House financial-services committee is also revving into gear, and may hold hearings on Chinese-company accounting in 2011, according to a person familiar with the matter. 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.”

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2 thoughts on “Congress and SEC Hit Stocks Made in China – WSJ.com

  1. The Chinese stock market is the best performing stock market in Asia this year (as far as major market indices go), and one of the better performing stock markets in the world (so far, at least). This is most fascinating, because if you were to ask the average investor, “Which five stock markets in the world would you not invest funds in?” I am confident that the Chinese stock market would be one of the popular picks.

  2. The Chinese stock market is the best performing stock market in Asia this year (as far as major market indices go), and one of the better performing stock markets in the world (so far, at least). This is most fascinating, because if you were to ask the average investor, “Which five stock markets in the world would you not invest funds in?” I am confident that the Chinese stock market would be one of the popular picks.

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