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法律动态

SEC Sues Chinese Companies for Fraud

2013-09-11

U.S. Securities and Exchange Commission has brought suit against two Chinese companies for transferring 29 million USD from investors in 2010. According to the indictment, the CEOs of the two Guangdong based companies made false statement in their IPOs in 2010.

In their IPOs, one company raised 7.6 million USD in June 2010 while the other raised 21.5 million USD in April 2010. SEC accuses the two companies and their executives of “transferring the money as soon as they received it”, which is contrary to their statements. The indictment says “in order to hide the transfer, the defendants forged bank and accounting records to reflect a inflated cash balance, deceived their auditors, and provided the committee with false and misleading records.” SEC claims that the two companies hired the same audit firm and the companies’ executives also made false statement in the subpoenas. SEC says the audit firm hired by the two companies ceased their contracts after the regulatory agencies looked into the matters, since when both of the companies failed to submit periodical reports.
 

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