There has been lots of fraud alledgeations regarding stocks that are RTO. Why would these companies be listed in north america exchange yet not listed in shanghai or hong kong? Because the penalty for security fraud is the death penalty in China versus the US it's just jail or no jail time at all or just fine.
Cash rich chinese companies buy up failing american companies that are public listed in the US, and they become instantly listed on the exchange bypassing all the paperwork required to file IPO. Then they can tell their customers and put on their website that they are a public traded company in the US, increasing its credibility. Same goes for listing on the chinese/shanghai stock exchange, there is no fail stocks there because the # of companies want to be listed far exceeds the government allowed limit. So as soon as a public traded company is not doing well/failing, you will have a dozen suitors in tow trying to buy it, they will throw cash and pay above market price per share just to become publicly listed, that alone is more valuable than many of the listed companies themselves. In term of fundamentals and balance sheet, they are all cooked, there is no concept over there. You trade purely based on momentum. I am sure some of the largest ones like bidu etc..may have proper bookkeeping, but most are all bullshit. I remember years back buying into this company (ticker ffhl), thought i found a hidden gem, checked its balance sheet, made sure it has its own working factories, made physical in demand goods (some sort of high tech film materials used by many), even got a few guys to visit their plant to make sure everything is legit. But nope, it turned out to be a complete fraud, all the books were bad. Stock went above $25 if i remember correctly, then everyone realized what's going on with the financials, the volume completely dried up and the stock went to $1, i was too stubborn to sell at the time, lost about $40k. After that, the only chinese stock i buy is on the shanghai stock exchange and mostly sp500-type indices. Becareful.
wrong, the main purpose was to give the investment banker the commission to do the ipo when there lots of liquidity in the market 2005/2006/2007/2008 the hedge funds who buy them and and investment banks who get the investment banker commission which can be as high as 15% or more. so big bucks for doing these ipos for the investment banks. the money was made in the ipo. the secondary market doesn't matter. the trading volume and secondary is so small it's not worth even trading it. or worth the annual listing fee for the company some ofthe chinese rto don't even bother filing the SEC fees. they don't care about the customers and the customer doesn't care if the company is public or private company. security fraud in China carries a death penalty. you have to understand these companeis are not listed in the hong kong or shanghia exchange but listed in US exchanges.
Mon, Jun 6 2011 Regulators scramble to warn on Chinese stocks By David Gaffen NEW YORK | Thu Jun 9, 2011 6:33pm EDT (Reuters) - Regulators scrambled to warn of the risks surrounding Chinese companies that have listed in the United States through reverse mergers, though critics said the intervention was too little, too late following a series of accounting scandals. Brokerages also continued to crack down by preventing investors from borrowing on margin to buy many Chinese stocks amid concerns about whether they were overvalued. The U.S. Securities and Exchange Commission said Thursday that it was urging investors to review company filings and in particular watch for those who are not required to file financial reports with the regulator, but plenty of investors have already been burned. The Nasdaq Stock Market also moved on Wednesday to toughen up proposed new listing requirements for companies that had gone public by combining with listed shell entities. It plans to seek additional financial information for such foreign entities, stressing it must be in English and filed within six months of the end of the relevant quarter. The SEC, which has also launched a broad investigation ............. http://www.reuters.com/article/2011/06/09/us-chinastocks-warning-idUSTRE7586E120110609 this is one more example of people being lulled by the regulators -sec into thinking there is no risk.- what else is new? the sec is there after after the horse has left the barn.
what the fuck are you talking about, none of it make any sense. you think companies list on the us exchange instead of shanghai because they are afraid of china's death penalty? put down the crackpipe..
if a Chinese company does commit fraud with a US NASDAQ shell, what does the SEC do to the company's management?
What can they do when the management isn't in the US - send a sternly worded note? They didn't do much to these guys, who did outright fraud with a real IPO not a shell. http://cer8.wordpress.com/2012/06/29/tbet-a-fraudulent-ipo/