This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Small Cast Stars in China Reverse Mergers

"For 13 years, I did my best to work for Nasdaq to make sure whatever companies I was sending to the U.S. were quality ones in compliance with regulations," said Xu. He no longer works for Nasdaq, but remains in China and is still helping Chinese companies get listed on U.S. stock exchanges.

No substantive conflict involving a Nasdaq official has ever come to light. A Nasdaq regulatory official declined to discuss the work of former employees, citing personnel policy. The exchange said it strictly forbids conflicts relating to new listings. The official said that, where a Nasdaq employee is involved in recruiting a company to list on the Nasdaq, "they would not be permitted to buy securities in the company that he or she was soliciting to list."

Benjamin Wey
Benjamin Wey

Asensio's issues with Xu stem from a press event that occurred in China two years ago. The purpose of the event was to announce a successful reverse merger and U.S. listing involving China's Shenyang Taiyu Machinery & Electronic Equipment. Xu attended the event. The RTO involving Taiyu was engineered via an American shell company called Pacific Goldrim Resources. The merged company is now known as SmartHeat (HEAT) and is traded on the Nasdaq. The RTO deal was guided by Wey.

Explore the Small World of RTOs

SmartHeat hasn't faced any negative allegations and its shares have performed better than many other RTOs, but lately the stock has felt pressure from fears of dilution. The company's shares hit a high of $18.60 in January, before tumbling to $5 after the company on Nov. 18 announced a secondary offering of 5 million shares.

There has been concern about closeness between Xu and Wey among others involved in the small world of Chinese RTOs. According to one due-diligence investigator in China, who spoke on condition of anonymity, Xu visited two Chinese companies accompanied by Li Ming, a senior executive at Wey's firm.

2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HEAT $0.05 0.00%
AAPL $124.25 -0.14%
FB $81.66 -0.67%
GOOG $542.56 -0.99%
TSLA $187.59 -0.63%

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs