Invasion of the Chinese Reverse Mergers: “We Are Under Attack,” Josh Brown Says

Don't buy stock in a company unless you understand the company. Yes?

I seem to remember a financial crisis starting a couple of years ago. Supposedly it was devastating to the world. We found out S&P and Moody's were giving AAA ratings to CDO's even though they had no idea what was in them in order to get their fees. Goldman Sachs was allowing short bets on the very products they were selling as good investments to their clients. Lenders were selling loans to people, who in some cases, never made a first payment on the loan. I haven't even gotten to the foreign manipulation part....LOL! I try and buy US produced products as much as possible but let's not forget (not bashing, just my opinion) the Chinese want to be the largest producing country in the world and could never have gotten to this point without the US' help. We may not deserve living under a false sense of protection from our government but, the fact is, our own homegrown companies have done this over and over to us, the American citizen.

I netted a loss on China Electric Motor. This was the first time I got hit with fraud. I should of saw the signs, company gave themselves plenty of stock, they had insider resells right after IPo, they filed a secondary, and their website was down for a while. But we all wanted to believe.

"Scamming" is alive and doing well on Wall Street. Just like "old times"! This type of thing is not new. It has been around for a long time. "Caveat emptor" is still the watchword. If you want to "bungle in the jungle" you are liable to get eaten by the animals.

As a PM on Bay St, I can tell you first hand that this is not news, and almost 99% of the time was the unscrupulous hustlers on Wall St. that engineered the deal, China happens to be new play ground for them to launch their shady deals, Brazil, India, UAE, east europe countries, you name it.

What in the world is the SEC for anyhow. Do they not check out these IPO's to see if they are legit before they are launched.

Just as they were when Bernie Madoff was ripping off America, the SEC is too busy looking at porn on their computers at work.

And we pay these guys to protect us?!?!?

I hope everybody enjoyed the $11 toasters from Wal*Mart

They're mad because only Wall Street is supposed to be able to rip us off on our own soil. Looks like China learned from the best.

I don't trust any Chinese company at all, they are all crooks. I only trust American company, like Enron, AIG, GM, and especially GS, which is doing God's works for us. If one day i got rich, I'll let Mr. Madoff to manage my investment. With SEC's supervision and Wall street bankers' professionlism, what could go wrong?

these guys are hired by those from Wall Street who short the stock of these Chinese companies.

If you look a bit further into these phony deals you will probably fiind Goldman Sachs as a financial advisor. They are experts at screwing investors.

What a boat load of crap, wall street people are the biggest blood suckers in the whole world, I'm sure a lot them opened their arms to welcome those companies, and taught them tricks on how to steal money from Americans, and now some of them who didn't get any share of the pie jump out and yell "we are under attack"?? How did you think those Chinese companies were able to manipulate the stock market, got around the regulations and stole the Money, American taught them ! Some of you think SEC will protect you and clean up the @#$%, good luck on that, whom do you think is running the SEC? wall street blood suckers.

The SEC is a joke. De-regulation has destroyed the faith of the public in our system.

Nothing that wasn't done with US companies previously. I think you guys shoudln't be looking at this from Chinese angle too much, too easy to make a scapegoat. The real bandits are the US financial advisers that set these up, after all how do you think this starts? Do you really think some Chinese company calls up Wall Street and says, look we have an ailing company but would like to steal money from your markets. Or, do you think Wall Street calls up Chinese companies and proposes to get them listed in the US to help them finance the future? Wall Street will always put a quick buck before anything else.

This article is very misleading. First of all, launching an IPO is not an easy proposition, and shell corporations are not allowed to launch an IPO. So the authors claim that the companies were create for this purpose is outright disinformation. These companies are only considered shells because they are failing, but at the time of their IPO, they were viable corporations...at least according to the SEC. In most cases of these reverse mergers, the publically traded companies are basically in the process of going under. Anyone could buy these corporations, and Chinese companies are not the only ones purchasing failing publically traded corporations to achieve publically traded status.

Also, this author seems to think that only Chinese companies do this. Nothing could be farther from the truth. It's also worth noting that Chinese corporations make up a small fraction of companies delisted or suspended by the SEC. Why is the author only outraged about Chinese companies cheating shareholders? US corporations do this all the time, but this author seems to be fine with that.

Here is an example of the sort of thing really going on here. China MediaExpress' trading was halted after it lost 48% of its share price in six weeks. It lost 33% in one day after Muddy Waters Research announced that the company was inflating its revenue figures, despite CME using Deloitte as their auditor. Before Deloitte left, they did a closer audit, and still no evidence of fraud was uncovered. So what promted Muddy Waters Research to make their announcement? It might have something to do with the fact that Muddy Waters Research specializes in shorting Chinese stocks. In Feb., shortly after MWR made its announcement, short shares made up over 10% of all shares. Sounds like it was MWR and other short sellers that wound up with a lot of the money that this author claims went to the Chinese.

I'm not saying Chinese companies don't commit fraud, but they are certainly not alone. The SEC has regulations, and if they are not followed, then companies are not allowed to play. I'm not exactly sure what this author wants. Does he want stricter SEC requirements for Chinese corporations than corporations from other countries? Or perhaps he simply wants to exclude Chinese corporations from buying US corporations. Maybe he want US corporations to corner the market on frauding shareholders.

I only know, wall street and the Government is invading my live from any means to destroy it.

U.S spent 60% of military spending of the whole world. Wall street control the financial market stealing from everyone, if not robbing.

Now they are pointing fingers to others to show they are innocent. Put them all into jail! Period.

Apparently, China and the countries of the middle east have figured out that the best way to defeat America is to focus on our most obvious weakness.....greed!
American's will sell their souls for money.

I lived and worked in China for 7 years and sold equiment to them from 1978 until 1995. In that time I came to understand the Chinese do not have the same ethical limitations that we do. We would say that a contract with the Chinese marked the beginning of negotiations. This economic invasion is not the same as whatever any other nationality has done. The manipulation of currency and the use of US laws to shield unethical behavior is acceptable to the Chinese who value money above ALL else. They believe they have government protection to steal intellectual property; and they do. We are in an economic fight without rules. The only good news is they seem just as willing to cheat other Chinese as well as us.

Americans are debt slaves.

Go listen to your talking monkeys as they rape the treasury over, over, over, over again.

Send in the league of Shadows, liquidate these M-f's all at once.