Americans Lose Billions In Chinese Investment Frauds
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Beginning in 2008, the NYSE & NASDAQ began to aggressively recruit Chinese firms to list on their exchanges. According to ABC, the exchanges did a poor job in verifying the financial health of the Chinese firms. SEC Chairman Mary Schapiro agreed they were "not as rigorous as they could have been." The SEC is focused on the liability of the "gatekeepers," the American auditing firms and middle men who helped bring these companies to market. Ultimately the biggest losers were pension funds and individual investors. Dan David of GeoInvesting believes the scandal could ultimately cost investors hundreds of billions of dollars. NASDAQ declined to speak to ABC as did General Wesley Clark, former chairman of Rodman and Renshaw, the American investment bank that raised the most money for fraudulent Chinese companies, such as China Integrated Energy. Jon Carnes conducted 4 months of video surveillance of China Integrated Energy and concluded that the company was essentially producing nothing. The factory only came to life during an investor tour hosted by Rodman and Renshaw. Mary Schapiro agrees that the the common theme seen by regulators is the brazenness of the fraud.