This is a very interesting development.
The reason I find it interesting is that it appears to be a "productization" of what they are doing with CCME.
Given that, I now think it is VERY unlikely that DLA Piper is going to bail on CCME. There is no way that new line of business gets off the ground if the first thing they do is bail out on their initial, and very prominent, client! I don't they would have made this announcement if they thought there was any likelihood at all of bailing out--they would not only get no business in their new venture, they would look very foolish and untrustworthy.
Although I doubt this is enough to "save" CCME, it does offer a glimmer of hope.
Chasing the ripple here, the emergence of this service, and potential future competing services from other name firms, could change the way China companies accused of fraud are perceived. There is now a "heavy weight" team that can be hired to be in a company's corner when attacked by MW or Citron or Little or their like.
**IF** such services gain traction, and a reputation for actually getting to the bottom of a company's issues and bringing them into view in a positive light (presumably more proactively than a traditional "auditor") China companies accused of fraud, etc. will separate into two groups:
1--those that hire a group such as Piper's new team to defend and respond (this will garner at least some initial credibility)
2--those that do not. Although the companies may protest that accusations are trivial, an unwillingness to bring in the heavies, and the implied level of transparency that implies, will lead to investors not believing the companies and pounding them.
It will be interesting to see how this plays out and how many clients DLA Piper secures for this LOB.
If I could afford to buy all of them, I would not need to buy any of them and I sure wouldn't be spending time on the message boards!
