LexisNexis® Legal Newsroom
Don’t Trash Our Sector…Please

Several recent statements by prominent regulators, as well as scathing press articles, primarily talking about the problem with Chinese reverse mergers, have decided to declare that because of the challenges in China, reverse mergers in general are bad. I"m not enjoying this time travel back...

Baby Heading Down with Bathwater? Nasdaq Requests Delay in “Re-IPO” Transactio

The Reverse Merger Wire reported today that the Nasdaq, in a filing with the SEC, is requesting that post-reverse merged companies that wish to uplist to Nasdaq have at least 6 months of trading over the counter before being allowed to move up. Apparently the idea is that having a few public filings...

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...

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...

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 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...

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...

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...