On April 25, 2011, The Edge Singapore published a story focusing on investments in Chinese companies listed on overseas exchanges. The article looked at the recent surge of investigations into US-listed Chinese companies due to apparent accounting irregularities and allegations of fraud by shareholders and seeks to draw lessons for investors in Chinese companies listed on the Singapore Exchange, SGX. The article points out that commissioner Luis Aguilar of the U.S. Securities and Exchange Commission recently remarked that the number of Chinese companies with either accounting deficiencies or that are “outright vessels of fraud” seems to be growing. Robbins Umeda LLP* is mentioned in the article as a resource for shareholders of these U.S.-listed Chinese companies.
Robbins Umeda LLP has handled numerous cases concerning accounting irregularities at U.S.-listed Chinese companies to date, and advises investors to look at a company’s corporate governance before investing. That includes its policies and practices on insider trading and related party transactions. “Good corporate governance, although not foolproof, tends to decrease the likelihood that fraud or insider misconduct will damage a company,” said attorney Gregory Del Gaizo.
Brian Robbins, the managing partner at Robbins Umeda LLP believes the number of cases stemming from these irregularities will likely keep rising. “Due to the sheer number of reverse merger companies and the scope of the accounting irregularities we are seeing, it is unlikely that the SEC or Department of Justice will have the resources to prosecute every case. It will then fall on ordinary shareholders to hold wrongdoers accountable. Robbins Umeda LLP attorneys are helping several shareholders with this now.”
* The firm name changed from Robbins Umeda LLP to Robbins LLP on January 1, 2013.