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 SEC is involved in a wide-ranging
investigation of Chinese companies that completed reverse mergers along with
their accountants, attorneys and investment bankers. Some stocks' trading has
been halted, and other companies have admitted accounting irregularities.
Will this type of bulletin have a real impact in the
marketplace? Hopefully not. I feel like a broken iTunes selection, but it seems
more and more that the issue with Chinese companies is the companies
themselves, not the method of going public. The recent disclosure that a
Goldman Sachs and Deloitte & Touche client that did a traditional IPO is
facing similar allegations shows that this is not about the path these
Let's hope this anti-RM fervor begins to calm down soon.
For additional insights on reverse mergers,
SPACs, other alternatives to traditional initial public offerings, the small
and microcap markets and the economy, visit the Reverse Merger and
SPAC Blog by David N. Feldman, Esq., Partner of Richardson &
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