China Stock Frauds

As of December 2010, the SEC had initiated an ongoing investigation into Chinese stock frauds in the United States,[1][2] and in April of 2011 the SEC Commissioner warned investors that a growing number of Chinese companies were "proving to have significant accounting deficiencies or being [sic] vessels of outright fraud."[3] The frauds appear to have been orchestrated on a massive scale by Chinese companies traded on North American stock exchanges.[4] A December 2010 review of the market capitalization losses of 150 China RTO companies estimated Americans' losses to have exceeded $34 billion.[5] The same review estimated that at least 30%[5] of the 500 China-based companies traded in American markets were fraudulent.[5]