LexisNexis® Legal Newsroom
Mickey, Donald and the FCPA

The Foreign Corrupt Practices Act (FCPA) enforcement arena is scattered with US companies which have gone many miles past the extra mile in providing travel and entertainment. Most practitioners will recall the Lucent Technologies 2007 enforcement action. Between 2001 and 2003 Lucent provided trips...

Top 3 FCPA Cases Of 2010 Part II-(Ding Dong) Avon Calling

This is the second installment of our three part series on the Top 3 Foreign Corrupt Practices Act (FCPA) matters of 2010 to date and their significance for the FCPA compliance professional. In Part I we focused on the Gun Sting matter . Now we turn our attention to the Avon bribery scandal in China...

Real Estate, China and the FCPA

China is hotbed for violations of the Foreign Corrupt Practices Act. The real estate industry is not immune from the dangers. In February of 2009 Morgan Stanley's real estate group reported an employee based in China in an overseas real estate subsidiary that appeared to have violated the Foreign...

U.S. Listed Chinese Companies Attracting Scrutiny, Securities Suits

For reasons I am sure they find good and sufficient, Chinese companies have been seeking listings on the U.S. securities exchanges. The Chinese companies (or at least some of them) have also been discovering an added side-effect of a U.S. listing - that is, exposure to a class action lawsuit under...

Welcome to the FCPA: Chinese Companies and Reverse Mergers

In a Wall Street Journal article on January 27, 2011 entitled " What's Behind China's Reverse IPOs ?", reporter Joseph Sternberg wrote that several Chinese companies were under investigation by the Securities and Exchange Commission (SEC) for "accounting irregularities"...

Do Chinese Companies Give the PRC Government Different Financials than to the SEC?

Well, kind of, but. The latest Reverse Merger Report talks about the fact that short sellers have been focusing on alleged differences between filings by public Chinese companies with their government as compared to what is filed in the US with the SEC and made available to the public. Audit...

Identifying Chinese Characters: Accounting Fraud Lawsuits Against Chinese Companies Surge

With four more securities suits involving Chinese or China-linked companies this past Friday, the phenomenon of securities class action lawsuits against these firms has emerged as one of the most distinct securities litigation trends so far this year. The filing trend actually first emerged in the...

Securities Suits Against Chinese Companies Continue to Mount

For several years, Friday has been the day when the latest bank closures are announced (about which see further below). More recently, Friday also seems to be the day when the latest securities class actions involving Chinese companies are announced. This past Friday alone, three more securities...

All China, All the Time

Even though the story has been brewing for months , the mainstream media and the SEC suddenly seem to have decided that the alleged accounting frauds involving certain U.S.-traded Chinese companies are the central story of the moment. You can hardly pick up the business papers or turn on the television...

This Week in Securities Litigation (July 8, 2011)

The SEC and the DOJ resolved another bid-rigging case related to anticompetitive practices in the municipal securities markets. This is one of a series in an ongoing investigation. The SEC also prevailed on a summary judgment motion in an investment fraud action, filed a settled financial fraud case...

$157 Million Ponzi Scheme Uncovered in China?

Several news outlets are reporting that a Chinese shopping website may have been outed last week as a Ponzi scheme, with the number of victims estimated in the hundreds of thousands and rumors that the founder had skipped town along with senior executives and the bulk of investor funds. While Yao Jianqing...

The Lure of Citizenship is the Key to an Offering Fraud Halted by the SEC

A path to U.S. citizenship premised on an immigration program crafted to help create jobs, and surrounded with misrepresentations and false documents was the lure used by Anshoo Seithi and his controlled entities to defraud 250 investors of millions of dollars, according to an SEC complaint. The...

SEC’s Action Seeking PRC Audit Papers Moves Forward

The SEC's action seeking to compel the production of documents from the Chinese affiliate of Deloitte and Touche is moving toward resolution. The Court rejected a request by the audit firm for a stay pending the resolution of a Commission administrative proceeding which is based on similar issues...

The PCAOB and the PRC Take An Initial Step

There may be a beginning to the end of the battle between U.S. and Chinese regulators over audit work papers relating to People's Republic of China (PRC)-based firms. The Public Accounting Oversight Board (PCAOB) announced a memorandum of understanding ( MOU) with its Chinese counterparts which...

A China Fraud Dissected: Part 1 Milton Webster, AgFeed Audit Committee Member and Whistleblower

Lawrence Blitz v. AgFeed Industries, Inc., Goldman Kurland & Mohidin LLP, McGladrey & Pullen LLP , et al is a securities fraud class action where investors claim the company’s expansion was “fueled in large part by fraud.” AgFeed began in the 1990’s as a Chinese manufacturer...

SEC, People's Republic of China-Based Audit Firms Reach a Settlement

The SEC and the People's Republic of China (PRC)-based affiliates of five major accounting firms entered into a settlement of proceedings initiated over the failure to produce audit work papers for issuers with substantial operations in China. The settlement, which provides a mechanism for governing...