YaSheng Group (HERB)

[RealDutch]

WRT to this from the latest 8-k....

Together with the dividend certificates, disclosure documentation will be included pursuant to SEC Rule 15c2-11.

I found this...
https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2755&context=dlj

In 1969 the Securities and Exchange Commission also attacked spin-offs with rule 15c2-11. This rule makes it fraudulent, manipulative, and deceptive for a broker or dealer to publish a quotation for a security unless one of the following has occurred: (1) the issuer has complied with the provisions of section 5 and the broker or dealer keeps a section 10 prospectus in his files; (2) the issuer has registered the securities in accordance with regulation A; (3) the issuer is a reporting company under the 1934 Act; or (4) the broker or dealer has on file, and available upon request, certain specified information. The information that must be kept on file is less extensive and less expensive to obtain than information required by section 5 registration.

Rule 15c2-11 is designed to prevent spin-offs that are outrageous attempts to circumvent section 5 registration. The rule, however, fails in two respects to protect investors adequately. First, it does not give any protection to the innocent minority shareholder who receives stock in a spin-off. For example, if a corporation is induced to spin off a subsidiary for a valid and substantial business reason, the shareholder may receive stock of a corporation about which he has little or no information. Nevertheless, rule 15c2-11 prevents him from selling the stock through a broker or dealer. The rule also begs the real question of whether a spin-off is subject to the registration provisions of the 1933 Act. This sidestep by the SEC in fact perverts the purpose of the 1933 Act. If the 1933 Act does not currently require disclosure, it is up to the legislature, not the Commission, to alter the law. On the other hand, the 1933 Act was certainly designed to provide initial investors with information about the issuing corporation, and the Act should not be circumvented merely by compliance with rule 15c2-11. Despite these shortcomings, rule 15c2-11 effectively provides some protection for the market by preventing holders of a spun stock from trading it in the market without minimal information