SEC Commissioner Takes Aim at China RTOs
WASHINGTON (TheStreet) -- A high-ranking securities regulator made the most extensive public statements yet about allegations of rampant fraud among hundreds of small Chinese companies that have raised capital in the U.S. in recent years through a "backdoor" process called a reverse merger.
In a speech in Washington on Monday, SEC Commissioner Luis Aguilar warned, however, that it will likely prove difficult for investors to recoup damages even in cases of clear-cut wrongdoing.
"Even though these companies are registered here in the U.S., there are limitations on the ability to enforce the securities laws, and for investors to recover their losses when disclosures are found to be untrue, or even fraudulent," Aguilar said.
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