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WASHINGTON (MarketWatch) — A top U.S. securities commissioner on Monday said he was concerned about a recent wave in which private companies merge with shell companies as means of going public.

“This is a disturbing trend in capital formation and investor protection,” said Securities and Exchange Commissioner Luis Aguilar at an event hosted by the Council of Institutional Investors.




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Aguilar, one of the SEC’s three Democratic commissioners, raised concerns about the trend of so-called “back-door” listings where a private company seeking to go public has its assets injected into a dormant shell public company and new capital is raised.

He noted that since 2007, there have been hundreds of such registrations in the U.S., including more than 150 by companies from China and in the China region. The Nasdaq has recently suspended trading in some of these companies.