SEC to deregister two bank confirmation scams | China Accounting Blog | Paul Gillis

SEC to deregister two bank confirmation scams

The SEC announced on Monday, June 13, 2011, that it has instituted proceedingsto determine whether stop orders should be issued suspending the effectiveness of registration statements filed by two companies – China IntelligentLighting and Electronics Inc. (CIL) and China Century Dragon Media (CDM). Both of these companies were recently involved inbank confirmation scandals.

The proceedings, which will commence on June 24, will likely lead to the revocation of the companies registration statement. While AMEX had already suspended the companies from trading, this action will end their status as public companies in the U.S. Many of the Chinese companies alleged to have committed fraud have been delisted from the major exchanges, but many, like early case RINO, continue to trade on the pink sheets.

It is encouraging to see the SEC move so quickly against these companies. Conspicuously missing, however, is a report by Chinese authorities that they have arrested company and bank officials for fraud. The company executives and bank officials are probably sleeping better after China suspended the death penalty last month.

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