Legal
Rich Anslow

Anslow & Jaclin Calls It Quits

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Anslow & Jaclin, the New Jersey law firm that was once one of the most active firms providing securities counsel to Chinese companies seeking to go public in the U.S. via reverse mergers, is dissolving after 20 years, according to partners Richard Anslow and Gregg Jaclin. The partners made announcement in private meetings with colleagues and clients attending the Rodman & Renshaw Global Investment Conference in New York from October 8-10. Each stressed the dissolution of the partnership was amicable and that both attorneys would remain active in securities practice for small cap companies. Anslow will be joining the New York-based firm Ellenoff, Grossman & Schole, while Jaclin is joining Lawrenceville, N.J.-based Szaferman, Lakind, Blumstein & Blader, effective October 1. In an interview, Rich Anslow said the decision to dissolve his partnership with Jaclin was a difficult one, but was necessitated by the precipitous decline in the Chinese reverse merger market.

Legal

Judge Limits Yuhe International Investor Suit against Underwriters

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The underwriters of a $40 million secondary offering in 2010 from chicken breeding company Yuhe International (YUII) are seeking the dismissal of a class action suit that claims they should have known about the company's alleged diversion of over $12 million. The court heard oral argument held last week, when counsel for underwriters including Rodman & Renshaw and Brean, Murray, Carret & Co. asked that the case against them be tossed out. A court ruling on July 10 whittled down the investors' claims to those involving five particular chicken farms Yuhe claimed to have under operation. The case against the underwriters was filed in a Los Angeles U.S. District Court, where the action by plaintiff aAd Partners LP was consolidated with the investor class action suit filed by Jeff Feyko.

Legal

China MediaExpress Charged with Fraudulent Financial Reporting by SEC

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The Securities and Exchange Commission is charging China-based reverse merger company China MediaExpress (CMEE) and its CEO with fraudulently misleading investors about its financial condition. China MediaExpress claimed that their cash balances were millions of dollars higher than actual amounts. The charges come more than two years after reports in the financial media and from short-biased research firms began suggesting the company, once named by Forbes China as the country's top "up-and-comer," was actually a massive fraud. China MediaExpress operates a television advertising network on airport express and inner-city public transit. The June 20 complaint charges CEO Zheng Cheng and China MediaExpress with violations of multiple antifraud provisions of federal securities laws, which could result in financial penalties, permanent injunctions, disgorgement, and an officer and director bar against Zheng.

Legal
Peter Siris

PIPE, Reverse Merger Cases Featured in SEC Whistleblower Eligibility List

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PIPE issuers and reverse merger companies are among parties named in a list of Securities and Exchange Commission enforcement actions that could earn cash rewards for whistleblowers. The list also includes an action against parties who allegedly reaped millions of dollars of illegal profits through improper sales of shares in a micro-cap company with negligible prospects. The Securities and Exchange Commission's Office of the Whistleblower published the list, which tracks enforcements where monetary sanctions exceed $1 million. "Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award," the commission's website says. It remains to be seen whether individuals will come forward to seek rewards.