The number of foreign companies listed on U.S. stock exchanges has grown over the past few years, with a significant amount of the increase coming from China. About 70 mainland Chinese companies are now listed in the U.S. and, inevitably, these companies have begun to feel the sting of securities class action litigation.
An article in today's China Daily discusses the regulatory difficulties faced by U.S.-listed Chinese companies and notes the recent SEC investigation and securities class action suit brought against the China Life insurance company over accounting irregularities. Judging by this line in the article, however, foreign understanding of the regulatory/litigation environment in the U.S. remains imperfect: "What seems most worrisome to management is that under the Sarbanes-Oxley Act, even restatement of accounts can trigger a class action by shareholders."Posted by Lyle Roberts at October 21, 2004 9:28 PM | TrackBack