I generally agree with that,but Sherb is the wild card in all this. Like Goldman Kurland,these Chinese small caps are their bread and butter;so they're in a tough spot. If they cry foul,they risk alienating a key part of their business. But if they overlook clear fraud,they risk running afoul of the SEC and/or subject themselves to lawsuits. Based on the CFO departure and the 10-K delay,I don't expect them to sign off,but it's not an obvious call(like it would be with a top-4 auditor).
1, the big problem is the Auditors-they need to be sued and spend some time in jail. Most of these companies were audited for the last couple years obvious not well but investors are relying on third party to look over the numbers. If auditor did there job they would not be listed. 2, The Banks raised billions for these companies with obvious very little due diligence- These are USA Banks who's expertise was suppose to be China in which they have offices there. What were these guys doing. The only bright spot is the market discounts everything- there will be no more reverse mergers, companies coming out this will have dramatic more transparency,more shareholder friends, and the market is clearing it up right now which is ugly.
Better late than never,but that's after these companies raised 1+ billion in secondary offerings over the past few yrs;money which ended up being stolen and/or wasted and can't be recouped by the U.S legal system.
And let's be real,the SEC did nothing to uncover this fraud. They only got involved after a relatively small group of short sellers urged them to look at what was going on. And it wasn't a matter of nickel and dime corner cutting,it was truly outrageous behavior.