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This is a real good write up today of what is really going on, and why the shorts were so successful with the timing of their attacks on China RM US stocks like CNOA, and so successful with the damage they caused. It is because they are between a rock and hard place. The problem is differences in US and China laws. READ all the way to the end!:
NEW YORK (Reuters) - Alarmed by widening accounting debacles at U.S.-listed Chinese companies, American regulators are scrambling to stem the damage from gaps in laws adopted to protect investors after the Enron scandal a decade ago.
U.S. investors had risked billions of dollars on hundreds of companies based in China - under a belief they were subject to U.S. rules when they sell and list shares in the United States - but a lot of that money has gone up in smoke.
The accounting blowups have humbled some prominent American investors such as top hedge fund manager John Paulson and former AIG CEO Maurice "Hank" Greenberg, spawned lawsuits and prompted a broad investigation by U.S. regulators.
Since March alone, more than two dozen U.S.-listed Chinese companies have announced auditor resignations or accounting problems, and there have been similar blowups in Canada.
Regulators and exchanges also have appeared flat-footed in the face of the growing scandal.
U.S. laws, including the sweeping 2002 Sarbanes-Oxley reform act meant to root out accounting fraud, lose some of their power with Chinese-based entities. The U.S. has no extradition treaty with China and the evidence gathering process in China is impeded by state secrets laws.
"The Chinese accounting problem has been festering for a long time," said Duke University law professor Jim Cox, who serves on a standing advisory group of the Public Company Accounting Oversight Board (PCAOB), which was set up under Sarbanes-Oxley to oversee accounting firms, including doing thorough inspections of their work.
Thwarted by state laws?
"It's going to get worse before it gets better," said Cox, who faults the U.S. Securities and Exchange Commission for not taking quicker action.
In particular, he said, the SEC has been slow to tighten oversight of U.S. shell companies acquired by Chinese firms through so-called "reverse mergers" to gain access to U.S. capital markets without having to go through an initial public offering.
SEC officials acknowledged problems with inspecting the accounting records of China-based companies well over a year ago at a meeting of the PCAOB advisory group, he said.
Meredith Cross, head of corporation finance for the SEC, said the agency has stepped up its reviews of Chinese reverse merger firms over the past year.
"We're currently thinking through whether there is more that we can do," Cross said.
A year ago, it launched a cross-border working group to review issues with Chinese reverse mergers and other companies with substantial foreign operations.
Officials from the SEC and PCAOB are holding talks with counterparts in Beijing this week in an attempt to get inspection access to Chinese auditors for U.S.-listed companies as one way to get on top of the problem.
But regulators said there is a core problem with tackling the reverse merger question head on because mergers come under state rather than federal law.
"We don't have a way to say, 'You can't do reverse mergers,'" said the SEC's Cross. "Because the issue of whether someone can merge is not an SEC question, but a matter of state law, it's not something where we could just wave a magic wand and say, 'we're not going to let reverse mergers happen anymore.'"
She did, though, note that such firms were bound by reporting requirements once they were listed.
The SEC also has resource constraints, she said, with about 350 people in its corporation finance division reviewing financial reports of more than 10,000 public companies. It has, though, been devoting more resources to the reverse mergers problem, she noted.
Further complicating matters, the SEC's Chinese counterpart, the China Securities Regulatory Commission, has no enforcement authority over many of the companies accused of fraud because they only sell shares in the United States.
Like other securities regulators, the CSRC has limited resources, said former SEC chairman Christopher Cox. "When triage is the name of the game, it's natural that the home country's priority is protecting its own citizens."
The SEC has brought several actions against China-based issuers in recent years. In most cases, action consisted of suspending trading or revoking companies' registration, though more severe penalties were also pursued.
China Energy Savings Technology Inc and its managers were ordered by a federal court in 2009 to pay a $34 million judgment after being charged with a stock manipulation scheme by the SEC.
Chinese courts typically do not enforce U.S. judgments, though at least $4 million will be recovered in that case because the SEC froze assets in the United States.
Access to work papers difficult
Accounting misconduct fell dramatically in the United States after authorities cracked down on corporate crime in the wake of the Enron and WorldCom frauds. A section of Sarbanes-Oxley that made it a felony for executives to certify false financial statements was one big deterrent.
That provision applies to companies that sell securities in U.S. markets, whether they are based in the United States or another country, but few Chinese executives fear being led away in handcuffs because of the lack of an extradition treaty, lawyers said.
"If you're a CEO of a company based in China and sign a false Sarbanes-Oxley certification, it's very difficult for the U.S. government or Justice Department to charge you with that crime, indict you and bring you to justice," said Phillip Kim, attorney at the Rosen Law Firm. "There are no treaties that provide for that."
Some Chinese executives resist answering to U.S. authorities at all, auditors said.
"They believe they should not have to respond if they feel any request is too intrusive and believe that they can tell the SEC no," Mimi Justice, head of Deloitte's forensic and dispute practice in Orange County, California said at a recent conference in Los Angeles.
Getting auditors' work papers -- crucial evidence in many accounting frauds -- has been especially difficult. Many accounting firms would like to hand over records but fear violating China's state secrets law, attorneys said.
"They have a real dilemma on their hands as to how to respond to the U.S. regulators when to do so might expose them to criminal sanctions in China," said Alan Linning, a partner at Sidley Austin in Hong Kong.
Crashing share prices and the publicity surrounding them do, of course, have their own Darwinian way of making investors more vigilant. There is, for example, much less appetite for new Chinese listings now, and many of the earlier listings are little more than penny-stock wreckage.
But to some that just begs the question -- is the action from the regulators too little, too late?
"I think the public is looking for an SEC that is proactive and in front of these issues, and they have yet to do that in this instance," said Lynn Turner, a former chief accountant at the SEC.
(Additional reporting by Sarah N. Lynch, Rachel Armstrong and Clare Baldwin. Editing by Martin Howell)
This is a real good write up today of what is really going on, and why the shorts were so successful with the timing of their attacks on China RM US stocks like CRTP, and so successful with the damage they caused. It is because they are between a rock and hard place. The problem is differences in US and China laws. READ all the way to the end!:
NEW YORK (Reuters) - Alarmed by widening accounting debacles at U.S.-listed Chinese companies, American regulators are scrambling to stem the damage from gaps in laws adopted to protect investors after the Enron scandal a decade ago.
U.S. investors had risked billions of dollars on hundreds of companies based in China - under a belief they were subject to U.S. rules when they sell and list shares in the United States - but a lot of that money has gone up in smoke.
The accounting blowups have humbled some prominent American investors such as top hedge fund manager John Paulson and former AIG CEO Maurice "Hank" Greenberg, spawned lawsuits and prompted a broad investigation by U.S. regulators.
Since March alone, more than two dozen U.S.-listed Chinese companies have announced auditor resignations or accounting problems, and there have been similar blowups in Canada.
Regulators and exchanges also have appeared flat-footed in the face of the growing scandal.
U.S. laws, including the sweeping 2002 Sarbanes-Oxley reform act meant to root out accounting fraud, lose some of their power with Chinese-based entities. The U.S. has no extradition treaty with China and the evidence gathering process in China is impeded by state secrets laws.
"The Chinese accounting problem has been festering for a long time," said Duke University law professor Jim Cox, who serves on a standing advisory group of the Public Company Accounting Oversight Board (PCAOB), which was set up under Sarbanes-Oxley to oversee accounting firms, including doing thorough inspections of their work.
Thwarted by state laws?
"It's going to get worse before it gets better," said Cox, who faults the U.S. Securities and Exchange Commission for not taking quicker action.
In particular, he said, the SEC has been slow to tighten oversight of U.S. shell companies acquired by Chinese firms through so-called "reverse mergers" to gain access to U.S. capital markets without having to go through an initial public offering.
SEC officials acknowledged problems with inspecting the accounting records of China-based companies well over a year ago at a meeting of the PCAOB advisory group, he said.
Meredith Cross, head of corporation finance for the SEC, said the agency has stepped up its reviews of Chinese reverse merger firms over the past year.
"We're currently thinking through whether there is more that we can do," Cross said.
A year ago, it launched a cross-border working group to review issues with Chinese reverse mergers and other companies with substantial foreign operations.
Officials from the SEC and PCAOB are holding talks with counterparts in Beijing this week in an attempt to get inspection access to Chinese auditors for U.S.-listed companies as one way to get on top of the problem.
But regulators said there is a core problem with tackling the reverse merger question head on because mergers come under state rather than federal law.
"We don't have a way to say, 'You can't do reverse mergers,'" said the SEC's Cross. "Because the issue of whether someone can merge is not an SEC question, but a matter of state law, it's not something where we could just wave a magic wand and say, 'we're not going to let reverse mergers happen anymore.'"
She did, though, note that such firms were bound by reporting requirements once they were listed.
The SEC also has resource constraints, she said, with about 350 people in its corporation finance division reviewing financial reports of more than 10,000 public companies. It has, though, been devoting more resources to the reverse mergers problem, she noted.
Further complicating matters, the SEC's Chinese counterpart, the China Securities Regulatory Commission, has no enforcement authority over many of the companies accused of fraud because they only sell shares in the United States.
Like other securities regulators, the CSRC has limited resources, said former SEC chairman Christopher Cox. "When triage is the name of the game, it's natural that the home country's priority is protecting its own citizens."
The SEC has brought several actions against China-based issuers in recent years. In most cases, action consisted of suspending trading or revoking companies' registration, though more severe penalties were also pursued.
China Energy Savings Technology Inc and its managers were ordered by a federal court in 2009 to pay a $34 million judgment after being charged with a stock manipulation scheme by the SEC.
Chinese courts typically do not enforce U.S. judgments, though at least $4 million will be recovered in that case because the SEC froze assets in the United States.
Access to work papers difficult
Accounting misconduct fell dramatically in the United States after authorities cracked down on corporate crime in the wake of the Enron and WorldCom frauds. A section of Sarbanes-Oxley that made it a felony for executives to certify false financial statements was one big deterrent.
That provision applies to companies that sell securities in U.S. markets, whether they are based in the United States or another country, but few Chinese executives fear being led away in handcuffs because of the lack of an extradition treaty, lawyers said.
"If you're a CEO of a company based in China and sign a false Sarbanes-Oxley certification, it's very difficult for the U.S. government or Justice Department to charge you with that crime, indict you and bring you to justice," said Phillip Kim, attorney at the Rosen Law Firm. "There are no treaties that provide for that."
Some Chinese executives resist answering to U.S. authorities at all, auditors said.
"They believe they should not have to respond if they feel any request is too intrusive and believe that they can tell the SEC no," Mimi Justice, head of Deloitte's forensic and dispute practice in Orange County, California said at a recent conference in Los Angeles.
Getting auditors' work papers -- crucial evidence in many accounting frauds -- has been especially difficult. Many accounting firms would like to hand over records but fear violating China's state secrets law, attorneys said.
"They have a real dilemma on their hands as to how to respond to the U.S. regulators when to do so might expose them to criminal sanctions in China," said Alan Linning, a partner at Sidley Austin in Hong Kong.
Crashing share prices and the publicity surrounding them do, of course, have their own Darwinian way of making investors more vigilant. There is, for example, much less appetite for new Chinese listings now, and many of the earlier listings are little more than penny-stock wreckage.
But to some that just begs the question -- is the action from the regulators too little, too late?
"I think the public is looking for an SEC that is proactive and in front of these issues, and they have yet to do that in this instance," said Lynn Turner, a former chief accountant at the SEC.
(Additional reporting by Sarah N. Lynch, Rachel Armstrong and Clare Baldwin. Editing by Martin Howell)
This is a real good write up today of what is really going on, and why the shorts were so successful with the timing of their attacks on China RM US stocks like CSGH, and so successful with the damage they caused. It is because they are between a rock and hard place. The problem is differences in US and China laws. READ all the way to the end!:
NEW YORK (Reuters) - Alarmed by widening accounting debacles at U.S.-listed Chinese companies, American regulators are scrambling to stem the damage from gaps in laws adopted to protect investors after the Enron scandal a decade ago.
U.S. investors had risked billions of dollars on hundreds of companies based in China - under a belief they were subject to U.S. rules when they sell and list shares in the United States - but a lot of that money has gone up in smoke.
The accounting blowups have humbled some prominent American investors such as top hedge fund manager John Paulson and former AIG CEO Maurice "Hank" Greenberg, spawned lawsuits and prompted a broad investigation by U.S. regulators.
Since March alone, more than two dozen U.S.-listed Chinese companies have announced auditor resignations or accounting problems, and there have been similar blowups in Canada.
Regulators and exchanges also have appeared flat-footed in the face of the growing scandal.
U.S. laws, including the sweeping 2002 Sarbanes-Oxley reform act meant to root out accounting fraud, lose some of their power with Chinese-based entities. The U.S. has no extradition treaty with China and the evidence gathering process in China is impeded by state secrets laws.
"The Chinese accounting problem has been festering for a long time," said Duke University law professor Jim Cox, who serves on a standing advisory group of the Public Company Accounting Oversight Board (PCAOB), which was set up under Sarbanes-Oxley to oversee accounting firms, including doing thorough inspections of their work.
Thwarted by state laws?
"It's going to get worse before it gets better," said Cox, who faults the U.S. Securities and Exchange Commission for not taking quicker action.
In particular, he said, the SEC has been slow to tighten oversight of U.S. shell companies acquired by Chinese firms through so-called "reverse mergers" to gain access to U.S. capital markets without having to go through an initial public offering.
SEC officials acknowledged problems with inspecting the accounting records of China-based companies well over a year ago at a meeting of the PCAOB advisory group, he said.
Meredith Cross, head of corporation finance for the SEC, said the agency has stepped up its reviews of Chinese reverse merger firms over the past year.
"We're currently thinking through whether there is more that we can do," Cross said.
A year ago, it launched a cross-border working group to review issues with Chinese reverse mergers and other companies with substantial foreign operations.
Officials from the SEC and PCAOB are holding talks with counterparts in Beijing this week in an attempt to get inspection access to Chinese auditors for U.S.-listed companies as one way to get on top of the problem.
But regulators said there is a core problem with tackling the reverse merger question head on because mergers come under state rather than federal law.
"We don't have a way to say, 'You can't do reverse mergers,'" said the SEC's Cross. "Because the issue of whether someone can merge is not an SEC question, but a matter of state law, it's not something where we could just wave a magic wand and say, 'we're not going to let reverse mergers happen anymore.'"
She did, though, note that such firms were bound by reporting requirements once they were listed.
The SEC also has resource constraints, she said, with about 350 people in its corporation finance division reviewing financial reports of more than 10,000 public companies. It has, though, been devoting more resources to the reverse mergers problem, she noted.
Further complicating matters, the SEC's Chinese counterpart, the China Securities Regulatory Commission, has no enforcement authority over many of the companies accused of fraud because they only sell shares in the United States.
Like other securities regulators, the CSRC has limited resources, said former SEC chairman Christopher Cox. "When triage is the name of the game, it's natural that the home country's priority is protecting its own citizens."
The SEC has brought several actions against China-based issuers in recent years. In most cases, action consisted of suspending trading or revoking companies' registration, though more severe penalties were also pursued.
China Energy Savings Technology Inc and its managers were ordered by a federal court in 2009 to pay a $34 million judgment after being charged with a stock manipulation scheme by the SEC.
Chinese courts typically do not enforce U.S. judgments, though at least $4 million will be recovered in that case because the SEC froze assets in the United States.
Access to work papers difficult
Accounting misconduct fell dramatically in the United States after authorities cracked down on corporate crime in the wake of the Enron and WorldCom frauds. A section of Sarbanes-Oxley that made it a felony for executives to certify false financial statements was one big deterrent.
That provision applies to companies that sell securities in U.S. markets, whether they are based in the United States or another country, but few Chinese executives fear being led away in handcuffs because of the lack of an extradition treaty, lawyers said.
"If you're a CEO of a company based in China and sign a false Sarbanes-Oxley certification, it's very difficult for the U.S. government or Justice Department to charge you with that crime, indict you and bring you to justice," said Phillip Kim, attorney at the Rosen Law Firm. "There are no treaties that provide for that."
Some Chinese executives resist answering to U.S. authorities at all, auditors said.
"They believe they should not have to respond if they feel any request is too intrusive and believe that they can tell the SEC no," Mimi Justice, head of Deloitte's forensic and dispute practice in Orange County, California said at a recent conference in Los Angeles.
Getting auditors' work papers -- crucial evidence in many accounting frauds -- has been especially difficult. Many accounting firms would like to hand over records but fear violating China's state secrets law, attorneys said.
"They have a real dilemma on their hands as to how to respond to the U.S. regulators when to do so might expose them to criminal sanctions in China," said Alan Linning, a partner at Sidley Austin in Hong Kong.
Crashing share prices and the publicity surrounding them do, of course, have their own Darwinian way of making investors more vigilant. There is, for example, much less appetite for new Chinese listings now, and many of the earlier listings are little more than penny-stock wreckage.
But to some that just begs the question -- is the action from the regulators too little, too late?
"I think the public is looking for an SEC that is proactive and in front of these issues, and they have yet to do that in this instance," said Lynn Turner, a former chief accountant at the SEC.
(Additional reporting by Sarah N. Lynch, Rachel Armstrong and Clare Baldwin. Editing by Martin Howell)
This is a real good write up today of what is really going on, and why the shorts were so successful with the timing of their attacks on China RM US stocks like CBEH, and so successful with the damage they caused. It is because they are between a rock and hard place. The problem is differences in US and China laws. READ all the way to the end!:
NEW YORK (Reuters) - Alarmed by widening accounting debacles at U.S.-listed Chinese companies, American regulators are scrambling to stem the damage from gaps in laws adopted to protect investors after the Enron scandal a decade ago.
U.S. investors had risked billions of dollars on hundreds of companies based in China - under a belief they were subject to U.S. rules when they sell and list shares in the United States - but a lot of that money has gone up in smoke.
The accounting blowups have humbled some prominent American investors such as top hedge fund manager John Paulson and former AIG CEO Maurice "Hank" Greenberg, spawned lawsuits and prompted a broad investigation by U.S. regulators.
Since March alone, more than two dozen U.S.-listed Chinese companies have announced auditor resignations or accounting problems, and there have been similar blowups in Canada.
Regulators and exchanges also have appeared flat-footed in the face of the growing scandal.
U.S. laws, including the sweeping 2002 Sarbanes-Oxley reform act meant to root out accounting fraud, lose some of their power with Chinese-based entities. The U.S. has no extradition treaty with China and the evidence gathering process in China is impeded by state secrets laws.
"The Chinese accounting problem has been festering for a long time," said Duke University law professor Jim Cox, who serves on a standing advisory group of the Public Company Accounting Oversight Board (PCAOB), which was set up under Sarbanes-Oxley to oversee accounting firms, including doing thorough inspections of their work.
Thwarted by state laws?
"It's going to get worse before it gets better," said Cox, who faults the U.S. Securities and Exchange Commission for not taking quicker action.
In particular, he said, the SEC has been slow to tighten oversight of U.S. shell companies acquired by Chinese firms through so-called "reverse mergers" to gain access to U.S. capital markets without having to go through an initial public offering.
SEC officials acknowledged problems with inspecting the accounting records of China-based companies well over a year ago at a meeting of the PCAOB advisory group, he said.
Meredith Cross, head of corporation finance for the SEC, said the agency has stepped up its reviews of Chinese reverse merger firms over the past year.
"We're currently thinking through whether there is more that we can do," Cross said.
A year ago, it launched a cross-border working group to review issues with Chinese reverse mergers and other companies with substantial foreign operations.
Officials from the SEC and PCAOB are holding talks with counterparts in Beijing this week in an attempt to get inspection access to Chinese auditors for U.S.-listed companies as one way to get on top of the problem.
But regulators said there is a core problem with tackling the reverse merger question head on because mergers come under state rather than federal law.
"We don't have a way to say, 'You can't do reverse mergers,'" said the SEC's Cross. "Because the issue of whether someone can merge is not an SEC question, but a matter of state law, it's not something where we could just wave a magic wand and say, 'we're not going to let reverse mergers happen anymore.'"
She did, though, note that such firms were bound by reporting requirements once they were listed.
The SEC also has resource constraints, she said, with about 350 people in its corporation finance division reviewing financial reports of more than 10,000 public companies. It has, though, been devoting more resources to the reverse mergers problem, she noted.
Further complicating matters, the SEC's Chinese counterpart, the China Securities Regulatory Commission, has no enforcement authority over many of the companies accused of fraud because they only sell shares in the United States.
Like other securities regulators, the CSRC has limited resources, said former SEC chairman Christopher Cox. "When triage is the name of the game, it's natural that the home country's priority is protecting its own citizens."
The SEC has brought several actions against China-based issuers in recent years. In most cases, action consisted of suspending trading or revoking companies' registration, though more severe penalties were also pursued.
China Energy Savings Technology Inc and its managers were ordered by a federal court in 2009 to pay a $34 million judgment after being charged with a stock manipulation scheme by the SEC.
Chinese courts typically do not enforce U.S. judgments, though at least $4 million will be recovered in that case because the SEC froze assets in the United States.
Access to work papers difficult
Accounting misconduct fell dramatically in the United States after authorities cracked down on corporate crime in the wake of the Enron and WorldCom frauds. A section of Sarbanes-Oxley that made it a felony for executives to certify false financial statements was one big deterrent.
That provision applies to companies that sell securities in U.S. markets, whether they are based in the United States or another country, but few Chinese executives fear being led away in handcuffs because of the lack of an extradition treaty, lawyers said.
"If you're a CEO of a company based in China and sign a false Sarbanes-Oxley certification, it's very difficult for the U.S. government or Justice Department to charge you with that crime, indict you and bring you to justice," said Phillip Kim, attorney at the Rosen Law Firm. "There are no treaties that provide for that."
Some Chinese executives resist answering to U.S. authorities at all, auditors said.
"They believe they should not have to respond if they feel any request is too intrusive and believe that they can tell the SEC no," Mimi Justice, head of Deloitte's forensic and dispute practice in Orange County, California said at a recent conference in Los Angeles.
Getting auditors' work papers -- crucial evidence in many accounting frauds -- has been especially difficult. Many accounting firms would like to hand over records but fear violating China's state secrets law, attorneys said.
"They have a real dilemma on their hands as to how to respond to the U.S. regulators when to do so might expose them to criminal sanctions in China," said Alan Linning, a partner at Sidley Austin in Hong Kong.
Crashing share prices and the publicity surrounding them do, of course, have their own Darwinian way of making investors more vigilant. There is, for example, much less appetite for new Chinese listings now, and many of the earlier listings are little more than penny-stock wreckage.
But to some that just begs the question -- is the action from the regulators too little, too late?
"I think the public is looking for an SEC that is proactive and in front of these issues, and they have yet to do that in this instance," said Lynn Turner, a former chief accountant at the SEC.
(Additional reporting by Sarah N. Lynch, Rachel Armstrong and Clare Baldwin. Editing by Martin Howell)
It was reported as a quote in a reported interview with the CEO of All Power, reported by one of the short article writers in Seeking Alpha (Varian View, IIRC) (so it was not unbiased journalism!!!), who has been quiet since they posted the two attack articles on ABAT. A third and fourth article, second writer popped up, but he screwed up the math on his ABAT attack so bad that no one listened to him after that.
This is a real good write up today of what is really going on, and why the shorts were so successful with the timing of their attacks on China RM US stocks, and so successful with the damage they caused. It is because they are between a rock and hard place. The problem is differences in US and China laws. READ all the way to the end!:
NEW YORK (Reuters) - Alarmed by widening accounting debacles at U.S.-listed Chinese companies, American regulators are scrambling to stem the damage from gaps in laws adopted to protect investors after the Enron scandal a decade ago.
U.S. investors had risked billions of dollars on hundreds of companies based in China - under a belief they were subject to U.S. rules when they sell and list shares in the United States - but a lot of that money has gone up in smoke.
The accounting blowups have humbled some prominent American investors such as top hedge fund manager John Paulson and former AIG CEO Maurice "Hank" Greenberg, spawned lawsuits and prompted a broad investigation by U.S. regulators.
Since March alone, more than two dozen U.S.-listed Chinese companies have announced auditor resignations or accounting problems, and there have been similar blowups in Canada.
Regulators and exchanges also have appeared flat-footed in the face of the growing scandal.
U.S. laws, including the sweeping 2002 Sarbanes-Oxley reform act meant to root out accounting fraud, lose some of their power with Chinese-based entities. The U.S. has no extradition treaty with China and the evidence gathering process in China is impeded by state secrets laws.
"The Chinese accounting problem has been festering for a long time," said Duke University law professor Jim Cox, who serves on a standing advisory group of the Public Company Accounting Oversight Board (PCAOB), which was set up under Sarbanes-Oxley to oversee accounting firms, including doing thorough inspections of their work.
Thwarted by state laws?
"It's going to get worse before it gets better," said Cox, who faults the U.S. Securities and Exchange Commission for not taking quicker action.
In particular, he said, the SEC has been slow to tighten oversight of U.S. shell companies acquired by Chinese firms through so-called "reverse mergers" to gain access to U.S. capital markets without having to go through an initial public offering.
SEC officials acknowledged problems with inspecting the accounting records of China-based companies well over a year ago at a meeting of the PCAOB advisory group, he said.
Meredith Cross, head of corporation finance for the SEC, said the agency has stepped up its reviews of Chinese reverse merger firms over the past year.
"We're currently thinking through whether there is more that we can do," Cross said.
A year ago, it launched a cross-border working group to review issues with Chinese reverse mergers and other companies with substantial foreign operations.
Officials from the SEC and PCAOB are holding talks with counterparts in Beijing this week in an attempt to get inspection access to Chinese auditors for U.S.-listed companies as one way to get on top of the problem.
But regulators said there is a core problem with tackling the reverse merger question head on because mergers come under state rather than federal law.
"We don't have a way to say, 'You can't do reverse mergers,'" said the SEC's Cross. "Because the issue of whether someone can merge is not an SEC question, but a matter of state law, it's not something where we could just wave a magic wand and say, 'we're not going to let reverse mergers happen anymore.'"
She did, though, note that such firms were bound by reporting requirements once they were listed.
The SEC also has resource constraints, she said, with about 350 people in its corporation finance division reviewing financial reports of more than 10,000 public companies. It has, though, been devoting more resources to the reverse mergers problem, she noted.
Further complicating matters, the SEC's Chinese counterpart, the China Securities Regulatory Commission, has no enforcement authority over many of the companies accused of fraud because they only sell shares in the United States.
Like other securities regulators, the CSRC has limited resources, said former SEC chairman Christopher Cox. "When triage is the name of the game, it's natural that the home country's priority is protecting its own citizens."
The SEC has brought several actions against China-based issuers in recent years. In most cases, action consisted of suspending trading or revoking companies' registration, though more severe penalties were also pursued.
China Energy Savings Technology Inc and its managers were ordered by a federal court in 2009 to pay a $34 million judgment after being charged with a stock manipulation scheme by the SEC.
Chinese courts typically do not enforce U.S. judgments, though at least $4 million will be recovered in that case because the SEC froze assets in the United States.
Access to work papers difficult
Accounting misconduct fell dramatically in the United States after authorities cracked down on corporate crime in the wake of the Enron and WorldCom frauds. A section of Sarbanes-Oxley that made it a felony for executives to certify false financial statements was one big deterrent.
That provision applies to companies that sell securities in U.S. markets, whether they are based in the United States or another country, but few Chinese executives fear being led away in handcuffs because of the lack of an extradition treaty, lawyers said.
"If you're a CEO of a company based in China and sign a false Sarbanes-Oxley certification, it's very difficult for the U.S. government or Justice Department to charge you with that crime, indict you and bring you to justice," said Phillip Kim, attorney at the Rosen Law Firm. "There are no treaties that provide for that."
Some Chinese executives resist answering to U.S. authorities at all, auditors said.
"They believe they should not have to respond if they feel any request is too intrusive and believe that they can tell the SEC no," Mimi Justice, head of Deloitte's forensic and dispute practice in Orange County, California said at a recent conference in Los Angeles.
Getting auditors' work papers -- crucial evidence in many accounting frauds -- has been especially difficult. Many accounting firms would like to hand over records but fear violating China's state secrets law, attorneys said.
"They have a real dilemma on their hands as to how to respond to the U.S. regulators when to do so might expose them to criminal sanctions in China," said Alan Linning, a partner at Sidley Austin in Hong Kong.
Crashing share prices and the publicity surrounding them do, of course, have their own Darwinian way of making investors more vigilant. There is, for example, much less appetite for new Chinese listings now, and many of the earlier listings are little more than penny-stock wreckage.
But to some that just begs the question -- is the action from the regulators too little, too late?
"I think the public is looking for an SEC that is proactive and in front of these issues, and they have yet to do that in this instance," said Lynn Turner, a former chief accountant at the SEC.
(Additional reporting by Sarah N. Lynch, Rachel Armstrong and Clare Baldwin. Editing by Martin Howell)
I have a different wave count than SE, and I think I see a bounce off of .016-.017 back up to the .02 to .03 range and a push up over .03, to maybe .04, before it settles back down to a trading range of 2-3 cents. Also we left a gap at .022 to .024 up above.
News on a return from Pink sheets to OTCBB:
http://ih.advfn.com/p.php?pid=nmona&article=48414909&symbol=TTEG
Nice link, had not been able to find that one. Thanks!!!! And fine looking scooters too, and hybrids with the li-iron-PO4 batteries as well!
Now to the other question, is there an internet link showing the connection between UPC and APA?
Interesting that short seller article claims were being made not too long ago that All-Power was not at all happy with ABAT and that they had severed their ties. And All Power had no signs of a scooter product on their web site at all (Only about 2-3 months ago). Is Northern a competitor to All Power, or are they related?
Not being able to find retail ABAT products online was one of the reasons the shorts got away with their bear raid on ABAT.
How did you decide this is an ABAT vehicle?
Could be, why?
I don't think I got around to posting this one about 10 days ago. Just ran across it again:
http://www.flowcontrolnetwork.com/applications/energy/article/us-epa-announces-7-case-studies-on-hydraulic-fracturing#en
Up another 18% today with a little more volume today. Really wishing I had bought a lot more at .40/share!
BCON is showing some real strength this week!
Last I heard we were nearing 40 million shares total issued. At .06/share that gives us a market cap of only 2.4 million dollars. IIRC the word was that 3M was willing to buy MVTG out before the Korean or LaFarge pilot plant deals were signed, for about $5 million dollars.
So this stock should be trading at least at .13/share if not double that at .25 share based on the current status.
The Australian news is interesting.
Interesting details in this news brief Fracking issues:
http://news.ino.com/headlines/?newsid=689796876797790
Very good point. ABAT may be planning to use the 10 million dollar buy back to do just that, to periodically push back over $1 and hold it there long enough to avoid delisting, until the shorts give up, cover and move on to tastier snacks.
To answer the other posters question on selling and buying back at .50, that depends on a number of things that we can not answer for you. The problem is we do not know what the short term price will do. In my case I bought shares at $2 and at $1, that I will not sell at a loss. But I will buy a lot more shares if the price goes lower, which averages my net cost lower, and keeps me in a stock that I see going to $10 or more in 18 months or so.
Day traders would have sold already, and would be looking for a bottom to buy back in, but day traders can miss the big long run. A lot depends on you investment style, risk comfort level, time you can wait to sell,
Some people may be waiting to see financial reports and sales after the new plant comes on line, but I think by then the stock will already be at $2-3 dollars again.
The big battle line will be at $1/share
If ABAT is not a fraud, it is the lowest cost producer of li-ion batteries in the world (based on their profit reports), and it is vertically integrated into a booming e-bike, e-scooter market, and has early sales into the hybrid bus and large vehicle tests for their larger li-ion batteries.
They are project something huge like a doubling of sales and profits over the next 9-12 months.
They will burn through some cash building the new plant and production lines over the next 3-4 months, but they have a huge pile of cash and no debt!!!!!
The next target is a test of the all time low, recent low of .79/share. There may be some support at .90/share.
Some of our sister China RM stocks have decided to fight back, by filing law suits to recover damages for libel from short seller article writers!
Could ABAT be next to counter sue?
http://ih.advfn.com/p.php?pid=nmona&article=48371984
I think this train just left the station folks! We broke through $8 to day, while everything else sold off!!!
Will this be one of those rare R/S cases that works? So far so good!!!
Any one besides me here? Somebody is buying this stock, it is up over 50% in a week since I nibbled at .40/share.
I should have bought more!!! LOL
Interesting little tidbit I just found on the SEC move to try and audit some China RM firms.
Some SEC investigations have been stalled as Chinese regulators blocked attempts to gather data even when the firms were willing to cooperate, a person with direct knowledge of the matter said in May.
I asked them this morning. Should be fixed soon (the ticker here).
Interesting little tidbit I just found on the SEC move to try and audit some China RM firms.
Some SEC investigations have been stalled as Chinese regulators blocked attempts to gather data even when the firms were willing to cooperate, a person with direct knowledge of the matter said in May.
Interesting little tidbit I just found on the SEC move to try and audit some China RM firms.
Some SEC investigations have been stalled as Chinese regulators blocked attempts to gather data even when the firms were willing to cooperate, a person with direct knowledge of the matter said in May.
Could go either way, 50 cents or $2. I am ready to buy more if goes to 50 cents. I agree, The Wild card here is Washington Debt battle, Euro-Italy-Greece problems and the debt rating agencies, summer, and possible low volume, all suggest it could bleed lower and test the prior low, before a sneak attack sends it to $2 or higher. I expect the stock to see $8 in about 18 months if the world does not come to an end first, based on the increased sales and new plant capacity they are building, and the fact they have no debt, and have cash to do the expansions.
Interesting little tidbit I just found on the SEC move to try and audit some China RM firms.
Some SEC investigations have been stalled as Chinese regulators blocked attempts to gather data even when the firms were willing to cooperate, a person with direct knowledge of the matter said in May.
CABN needs a partner like this:
Major news out today:
http://news.ino.com/headlines/?newsid=6897968768466712
Now that Chesapeake Energy has helped create a glut of natural gas in the U.S., it needs to get the country to use more of it.
Chesapeake, the second largest producer of natural gas in the U.S., announced Monday that it plans to invest $1 billion over 10 years in technologies designed to spur demand for the fuel.
Its first two investments will build natural gas fueling stations along the nation's highways and develop a technology that will use natural gas and plant material to make diesel and gasoline.
Major news out today:
http://news.ino.com/headlines/?newsid=6897968768466712
Now that Chesapeake Energy has helped create a glut of natural gas in the U.S., it needs to get the country to use more of it.
Chesapeake, the second largest producer of natural gas in the U.S., announced Monday that it plans to invest $1 billion over 10 years in technologies designed to spur demand for the fuel.
Its first two investments will build natural gas fueling stations along the nation's highways and develop a technology that will use natural gas and plant material to make diesel and gasoline.
HOLY COW! See today's news of the new COO! His credentials are incredibly impressive, especially if APWR was a fraud as so many claim. So I ask this question. If APWR is a fraud why did this guy join them as the new COO????
LOL.
A-Power Energy Generation Systems, Ltd. (NASDAQ: APWR) ("A-Power"), a leading provider of distributed power generation systems in China and a manufacturer of wind turbines, today announced that Mr. Shan Lee has been selected as A-Power's Interim Chief Operating Officer, effective on July 7, 2011.
Mr. Shan Lee has extensive experience in engineering, financial services, and commercial real estate.
Mr. Lee's most recent position was as Executive Vice President and Principal of Daum Commercial Real Estate Services in the City of Industry, California where he was involved in all significant phases of commercial and industrial real estate development, consulting, brokerage, management, and investment advisory services. His major clients included public companies, financial institutions, real estate investment trusts, major developers, and regional companies in various industries, both domestic and overseas.
Mr. Lee holds two master degrees, a master of science in electrical engineering from the University of Texas and a master of science in engineering management from the University of Southern California. His broad educational background and professional experience gives him strong analytical skills, unyielding discipline, and in-depth knowledge of the industries that he has served. He has extensive contacts in Pacific Rim countries and is fluent in Chinese.
Prior to joining Daum Commercial Real Estate Services in California, Mr. Lee worked with a high-tech start-up company, Compression Labs in San Jose, California, as a design engineer where he designed the pioneer video codec for the commercial broadcast quality video signal. As a senior system engineer at North American Philips/Magnavox Advanced Products & Systems Co., Torrance, California, he developed land-based and shipborne satellite navigation and communication terminals and designed the servo and control system for a shipborne phased-array antenna system. As a senior system engineer at Citigroup/Transaction Technologies, Inc., Santa Monica, California, he designed and developed the first home banking terminal and wireless banking terminals. He also worked with a local stock brokerage firm.
Mr. Lee currently serves as a commissioner of the Los Angeles County Business License Commission. He is actively involved with various community and professional organizations, including American Industrial Real Estate Association, Hacienda Heights Improvement Association, and the Chinese American Engineers & Scientists Association. He is 59.
About A-Power
A-Power Energy Generation Systems, Ltd. ("A-Power"), through its China-based operating subsidiaries, is a leading provider of distributed power generation systems in China and is expanding into the production of alternative power generation systems. Focusing on energy-efficient and environmentally friendly distributed power generation projects of 25 to 400 megawatts, A-Power also operates one of the largest wind turbine manufacturing facilities in China. A-Power acquired Evatech Co. Ltd., a designer and manufacturer of industrial equipment for amorphous-silicon photovoltaic panels, in January 2010.
In addition to the establishment of strategic relationships with some of the world's leading wind energy design and engineering companies, A-Power has formed joint research programs with Tsinghua University and the China Academy of Sciences to develop and commercialize other renewable energy technologies.
For more information, please visit www.apowerenergy.com.
LOL, you missed the whole point!!!! The point is they still have a phone that works (they must be paying the phone bills) and a dedicated CEO answering it, and not just a voicemail box like all the big fancy rich companies use now. $10/hr receptionists are a thing of the past, history. Trying getting a live voice on the phone at a billion dollar bank someday.
You need to clean that bear stain off your glasses (it is coloring your view), so you can see that the glass is half full, and not half empty! LOL
I did not say they have nothing new going on, or that he is not working on moving things along. To the contrary, the Autism site selling IFUS products is major news, and I would expect more news on that front, based on the recent success there. The Autism market is huge *(IIRC something like 1 in 200 kids have it now?), and we have no answers yet as to the cause or cure for it. Early reports seem to indicate IFUS products are noticeably helping children with Autism (why else would they start offering the products on the Autism site?), but we will need to wait for official reports and case histories before we can really blow any horns.
* http://autism.emedtv.com/autism/autism-statistics.html
I did not suggest that people should invest more here, or invest at all. All I can say is that I am holding until I have new information to evaluate whether to add or sell and move on, or to just keep holding. I also said I don't expect any huge news any time soon that might drive the price way up or down, but I also said that as with any stock, news can just happen, just like the earthquake in Japan this year just happened with no warning. So for now I am holding my shares. The stock has been in a stable sideways trading range for a good while. Currently, no new dilution to worry about. My last purchase was at about .004 which brought my average cost down to under .01, and I still have shares I bought at .11/share. I have yet to sell a single share of this stock, but I was also very careful to make small purchases earlier, and larger purchases at the current range, that looks like it might be a bottom. All I can say is it looks like this company might survive long enough to turn a profit someday, in part because the CEO has stopped wasting money on fluffy PRs, stopped diluting shares, and sounds like he has enough sales and inventory to keep the nutritional supplement operation afloat while sales grow organically. The other staff members seem to working at selling the products as well, but I did not ask for the details on that.
The subsidiary operation, Supreme energy (?), is not why I originally or currently invested here, but he is still trying to turn that operation around as well.
In summary, for me the big news here, is that the fluff PR from way back on Autism, is no longer fluff, the autism site is now selling the IFUS nutritional supplements.....which I find to be Impressive!
Interesting day Friday. While the markets went south, MNLU took and held .30 at the close, up 11%, and .30 is or was resistance lately!!!
Either news is coming (Loans finalized perhaps?) or people are buying the rumor on a big down day for the markets, which is very, very bullish for MNLU IMHO. Also DUNR people may be moving money back here, now that that party is a bust?
As I recall several others have counter sued, or sued already, one being DEER!
Thank God someone finally put the proper name on it! Thanks.
Unfortunately this is the media era we live in as a new form of cyber short terrorism has struck our financial markets.
SEC reports, and financials for last 3-5 years is the best source, unless you want to wallow through the Muddy Waters (LOL) of Bearville and their wanton third rate attacks on ABAT in Seeking alpha hit pieces, and their law firm shark buddies and ambulance chasers.
John Peterson writes frequently on the entire battery sector in incredible depth, in Seeking Alpha, including ABAT. He is an exe director of AXPW. I own shares in about 6 battery companies, but of them all this is the most undervalued, and the most profitable (if it is not a fraud, which I do believe it is!!!)
This is either a screaming value, with a huge growth rate, or a scam. One or the other. My money says it is a keeper, not a fraud, even if it has some minor BS accounting mistakes, like most of the China RTOs seem to have, due to basic differences in accounting between the two countries. What is a depreciable asset in China (just a wild example), might be an expense in US accounting, is what I think is causing some problems, and the shorts are taking advantage of it, and trying to make it look like fraud. I am not buying it. Some of the China stocks are frauds it seems, but Enron was a fraud too.
I read the prospectus and financials, cover to cover 2 years ago, and I put ABAT on my buy the dip watch list, for post merger buying of the scooter company. It has outperformed in sales and profits since then, and is showing no sign of slowing down.
I am bullish on China li-ion battery makers as the lowest cost, and best raw material supplied (Read about rare earth metals, and China shut down of exports of the raw materials) manufactures, over the US and Japan. They have no debt, have tons of cash, just announced a 10 million dollar stock buy back, and are building new productions lines that will be on line this year!
how many successful companies out there have their CEO answering the phone?
You missed one thing, they have been burning through $5 to 10 million dollars a year, pilling up losses, with no end in site. They paid about $20 million dollars for a BK company called Terra, that the CEO was a major stock holder in, and they bought it with $1 COIN shares (COIN was BK at that time, about August last year, but it still had a stock at $1/share, so they did a smoke and mirrors, hail mary pass merger, that created fake equity on the books, called good will from the purchase price paid for Terra WITH $1 COIN shares), but Terra has not sold a single new license since the merger, which makes it a cash burn problem just like COin was, so all the stock holders equity (good will) from buying Terra is smoke and mirrors accounting, it is worthless because Terra can not seem to close any new deals.
The 3 top executives are collecting about $1.2 million dollars a year in salary while the company has lost about 50 million dollars since 2007. They borrowed $5 million dollars with convertible debt with a conversion rate tied to the stock price, right after the merger. At 10 cent/share the Banksters got 10X as many shares in the conversion as they would have gotten at $1/share retail for COIN, and they are dumping them now. The banksters, and the lack of Terra sales, and flat lined sales of fertilizer, and the new Terra stock holders with all their new shares that became unrestricted a few months ago, have all been selling shares, getting out of Dodge early, as they know this one can not survive with out more new debt, and the last round of debt and merger buyout of a company with no sales has increased the OS by 2000% now, for a company that has never made a single dime of profit.
Only reason the stock stopped falling at 10 cents today, is that the minimum amount the Banksters will sell the new shares at while they dump the massive number of new shares they just converted from CD to new shares. Until the dump is finished, they will support the price at about 10 cents, but the end of the dump is near, may already be done?
"
Overall, I think they probably don't have any reliable data yet (i.e. true to scale) to even know what exactly the carbon footprint or even more importantly the operating cost of ERC will be. This is obviously being addressed by their partnerships right now, so for now it's just something that cannot be answered.
As the generation of electricity, per the carbon fund, releases on average about 1.306lbs CO2 per kWh, it would be preferable to absorb at least that much per kWh we consume using ERC
Last word on the debt was a little over $300,000, from what I have read here repeatedly.
This is so obviously a pump and dump this week. I am the MOD here, and I was long this stock for 3 years, but the final chapter, BK, writing is on the walls now IMHO. Read my earlier posts the past 10 days if you want the real story!!!
Don't get caught holding shares, as this will sell off to .01 or lower fast, once the big boys have finished dumping the hoard of new debt converted to common stock shares (about 50 million to 100 million new shares based on the SEC filing).
The best bid/ask is here:
http://www.otcmarkets.com/stock/coin/quote
And note that it is trading today with no market makers listed, which is a very bad omen!!! It could be back at .05 by the close today, when people realize the party mat be over. Just depends on when the debt sharks have finished dumping all those new shares.
There is good reason there are no MM bids or asks on the OTCBB today! They know better!!!! They are going to stand aside and watch it collapse! And they do not know when the Debt sharks will run out of shares, and stop supporting the price while they distribute the remaining shares. They may have lot more shares left to dump, I have no way of knowing how many they still have.
That PR yesterday was all fluff, not a new Terra license, but an old dead license, taken over by an unknown, and no news of any new cash from the deal (why, because there was non, or it was too small to put in the press release), so that news was all pure fluff BS!!! And now we have a hoard of fluff posters pumping the readers here to "BUY, BUY, BUY, LOL, Yea right. They will be gone soon as well, once the new dump is over, and the price will nose dive once again.
Looks like the CYTR rally has finally begun. Time to run this up to $2/share! just too much good, positive news on this one to be so over sold! We are up over 10% this morning already on more news.
LOL, it dropped to .16 at the open, and bounced up 100%, so the bounce, IMHO, is already over.
"What a POS ! The shorts will be all over it when this daytrader run is finished ! "
I agree with that!!!!!
On the loan sharks part, there are two sides that part. The loan sharks gave COIN one last chance at a hail mary pass of the foot ball, the long ball, but the CEO, quarterback just fumbled the ball again, and a gain. If they had closed Terra deal sales, like just 2 by march this year, this stock would have gone to $2, and the dilution would have been only 10% of what it ended up being.
The real crook is the CEO that let this PR scam cover the share dump today, IMHO! The CEO and BOD's are the ones that agreed to loan shark loans 6-7 months ago. If they had not, COIN would have been BK in January, as they had no credit left, no cash, and no new investors willing to buy new shares at $1. The CD loan sharks were the last chance to save all three parts of this sad mess.
Once the CD shares are distributed this will crash to new lows of .01 like a rock in free fall.