LexisNexis® Legal Newsroom
Small Sigh of Relief – Nasdaq “Seasoning” Proposal Exempts Underwritten Deals

Well you can never accuse me of being a good newsman! A short report in our industry trade publication surprised all. Nasdaq apparently was requesting a 6-month wait for all post-reverse merged companies to uplist to Nasdaq. During the 6 months they must trade over the counter at least at $4.00 a...

Humble Thoughts on Nasdaq Seasoning Proposal

At thesaurus.com, words like "color" and "enliven" are synonyms to the word "seasoning." Unfortunately I don't believe Nasdaq's extreme overreaction to a real, but relatively controlled issue, does either to the world of reverse mergers or the markets in general...

Strong First Quarter For Reverse Mergers

Despite, as The Reverse Merger Report put it, "continued attacks from short sellers, mounting fraud allegations, and numerous ongoing investigations of Chinese companies by the Securities and Exchange Commission," we completed the first quarter of 2011 strong in terms of number of reverse...

Deloitte and Goldman Join in China Challenges

The New York Times reported today that the SEC is investigating Longtop Financial Technologies, a Chinese software company that was taken public in 2007 by Goldman Sachs, with Deloitte & Touche as their auditors. Deloitte immediately resigned and Longtop's trading has been halted. Of course...

SEC To Issue “Investor Bulletin” on Reverse Mergers

Reuters is reporting that the Securities and Exchange Commission is about to release a so-called "investor bulletin" about reverse mergers. According to the report, an SEC spokesman said the bulletin would be "outlining the risks involved with reverse mergers." As we know, the...

Second Quarter Numbers Hit by China

Just 37 reverse mergers were completed in the second quarter of 2011, according to the Reverse Merger Report . That's down over 50% from the second quarter of last year. Still way more than IPOs, but down is down. Much of this, of course has to do with China. Only three Chinese APOs were completed...

The SEC Reverse Merger Investor Bulletin: Balanced?

I have finally had the chance to actually sit and read the SEC's vaunted "Investor Bulletin" on reverse mergers that came out last month. In recent years these bulletins have been seen more often. One warning folks about the retail foreign exchange market. Another on life settlements...

Surge of Securities Litigation Against U.S.-Listed Chinese Companies Raises Critical D&O Insurance Issues

By Kevin M. LaCroix, Esq., Executive Vice President, OakBridge Insurance Services and Peter M. Gillon, Partner, Pillsbury Winthrop Shaw Pittman LLP One of the most distinctive U.S. litigation trends over the last twelve months has been the surge of securities class action lawsuits filed against...

NYSE Joins Nasdaq in Proposing “Seasoning” After Reverse Mergers

Shoe #2 drops with a thud. The NYSE Euronext announced earlier this month that, like the Nasdaq, it wants reverse merger companies to trade on the over-the-counter market before being allowed to apply to uplist. Luckily, like Nasdaq, it exempts companies coming to the NYSE with a firm commitment...

More Developments in Proposed “Seasoning” Rules

As you know we previously reported that the Nasdaq has proposed requiring reverse merged companies to trade on the over-the-counter markets and meet other criteria for six months before being able to list on Nasdaq. The initial proposal in April said that the 6-month wait would not be required if...

SEC-Submitted Comment to Nasdaq’s “Seasoning” Proposal for Reverse Merged Companies

In addition to the comment I provided to the NYSE Amex's proposal to require reverse merged companies to "season" by trading over-the-counter for a period before applying to uplist (with an exception for a large public offering), I also submitted the comment below with regard to Nasdaq's...

SEC Provides Guidance on “Super” Forms 8-K

Earlier this week, the SEC's Division of Corporation Finance issued some guidance with the staff's observations in its reviews of "super" Forms 8-K filed following reverse mergers. As we know, in 2005 the SEC adopted a rule requiring the filing within four business days after a merger...

RMR Says BATS Likely to Require Seasoning; What About BX?

The latest issue of The Reverse Merger Report includes an unfortunate comment in its article on the BATS exchange, a new national securities exchange that is soon going to be taking on new listings. Its listing requirements are similar to Nasdaq. We were hopeful that this might be a home for future...

SEC Provides Guidance on “Super” Forms 8-K

The SEC's Division of Corporation Finance issued some guidance with the staff's observations in its reviews of "super" Forms 8-K filed following reverse mergers. As we know, in 2005 the SEC adopted a rule requiring the filing within four business days after a merger with a reporting...

Temperature Heats Up in PCAOB-China Talks

The Reverse Merger Wire reports that Public Company Accounting Oversight Board (PCAOB) Chair James Doty is growing a little impatient with Chinese securities regulators over the issue of inspections of Chinese accounting firms that are auditing US public companies. There was an apparently positive...

New Exchange Rules to Address Abuses in IPO Market Involving Reverse Mergers

On November 8, 2011, the SEC approved new rules that add requirements for initial listings that are accomplished through a reverse merger with a publicly traded shell company. Those that feel the new rules will have little impact base their view on the fact that American exchanges had already informally...

SEC: Thanks for Super 8-K Reviews

SEC Form 8-K is meant to report "current events" that occur between quarterly periodic reports by public companies. They are effective upon filing and not generally subject to SEC review. In 2005, to appropriately close a disclosure loophole, the SEC started requiring that an 8-K be filed...

Examine Going Public Options Carefully

In the brave new world of post-"seasoning" smallcap land, how does a company decide the best way to go public? If one assumes a traditional initial public offering is not available, or undesirable even if so, but a company sees the benefits of being public and can bear the costs of doing...

Big Award in Chinese Reverse Merger Case

In what appears to be the first actual judgment in the several dozen cases involving allegations of impropriety in cases of Chinese companies that went public in the US, a $77 million arbitration award was granted to a plaintiff in an arbitration case in Hong Kong. AIG CEO Hank Greenberg's...

Five Year SEC Ban for Reverse Merger Attorney

As if the reverse merger world needs another black eye, a previously well known attorney in the space agreed on Tuesday to stop practicing law before the Securities and Exchange Commission for five years. This results from an alleged improper opinion letter facilitating an alleged illegal public offering...

For the SEC, 2013 Was a Very Good Year for Targeting Financial Fraud

The Securities and Exchange Commission had a very good year targeting financial fraud. Those who commit fraud, not so much. In fiscal year 2013, the SEC’s enforcement actions resulted in a record $3.4 billion in monetary sanctions ordered against wrongdoers. The SEC filed 686 enforcement...

3 Key Takeaways from Securities Class Action Filings Report

Once again, Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse have prepared an annual report on the securities class action filings. And, once again, the report, Securities Class Action Filings—2013 Year in Review , has a plethora of information. We think...

SEC Files Partially Settled Manipulation Action

The Commission brought another action centered on reverse mergers involving Chinese issuers. This action differs from earlier cases, however, since it focuses on the promoters who are charged with manipulating the shares rather than the companies. SEC v. Kelley, (D. N.J. Filed May 5, 2014). The action...

5 Reasons Reverse Mergers Are Still Attractive

Like the rise and fall of some Hollywood stars, the reverse merger has faced both criticism and popularity over the decades. Through the 2000s many of us successfully showed the market how these combinations into non-operating public vehicles (including special purpose acquisition companies, or SPACs...

Reverse Mergers Still Attractive Despite New Black Eye

The big guys get hit and sanctioned for improper activity in the securities world. Big banks and investment banks all pay for misdeeds, some callously viewing it as simply a cost of doing business. The Enron and WorldCom scandals, among others, taught us that big companies can also be fraudulent enterprises...