Chinese companies with U.S.-listed shares have come under attack this year. Short-sellers and Internet-based research analysts are leading the charge with reports challenging the credibility of these companies’ financial reporting and disclosures. Plaintiffs’ lawyers have taken up the cause and filed more than 30 securities fraud class action lawsuits in the United States this year against Chinese companies. And the U.S. Securities and Exchange Commission (SEC) is focusing its regulatory and enforcement attention on China-based companies listed in the United States. The pattern that played out in the United States during 2011 is now taking hold in Canada. Factors specific to Chinese companies are combining with a renewed emphasis generally on securities class action litigation in Canada. These forces already have led to the filing of a multi-billion dollar securities class action against Sino-Forest Corporation, a China-based forestry company. Following the pattern seen in the United States, other Chinese companies listed in Canada are facing similar challenges to their financial reporting and business ethics. There are several reasons to believe that in the months ahead more China-based companies listed in Canada will draw the scrutiny of short-sellers, regulators, and the plaintiffs’ securities class action bar.
A Year to Forget for Chinese Companies Listed in the United States
The Same Patterns Are Emerging in Canada for Chinese Companies
A Renewed Emphasis on Securities Litigation in Canada
The Signs Point to More Securities Litigation in Canada for Chinese Companies
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