Due Diligence

Red Collar Crime Wave

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chinese-dragon-wallpapers22Over at his Reformed Broker blog, Josh Brown writes an enraged screed about an epidemic of corporate crime conducted on American shores by a ring of Chinese companies, which are stomping on shareholders as their executives violate contract law and fiduciary responsibility with accounting subterfuge and falsified filings. He calls these companies the "shell syndicate," as so many of them have reverse-merged into U.S.-traded shell companies; they have already claimed at least one high-profile victim: Yahoo! The SEC has apparently created a task force to deal with these fraudulent shell companies.

Here's a link to Brown's post. Reuters also recently wrote about the problem here, as did Bloomberg Businessweek here.

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