The SEC -- At Last -- Takes the Lid Off China Stock Fraud

From Forbes: Few episodes illustrate more clearly the pig’s ear the United States has been making of globalization than the scandal of “red collar crime.” The phrase  has been coined by my Forbes colleague Joshua Brown to describe a pattern of stock scams emanating from mainland China and targeting millions of unsuspecting American investors. Until recently such scams, which have been facilitated by not only  the Wall Street investment banking community but the American accounting profession, have been largely overlooked by the American and British financial press. Yet, according to an analysis by TheStreet.com, American investors’ losses  had already by last year totaled $34 billion.

Now finally the Securities and Exchange Commission has acted. SEC enforcement director Robert Khuzami yesterday charged the Chinese affiliates of five big accounting firms on Monday with violating securities laws because they had failed to provide requested documentation on the audits of several China-based companies under investigation for fraud.  This puts Washington and Beijing on what could turn out to be an epic collision course. ….

Read all about it at http://www.forbes.com/sites/eamonnfingleton/2012/12/04/this-is-big-the-sec-at-last-takes-the-lid-off-china-stock-scams/