Perils of Chinese Reserve-Merger Stocks: SEC Suspends Trading of CESV

Includes: BBC, CAAS, CESV
by: Herb Greenberg

To follow up on my Wall Street Journal story from Saturday regarding the possible perils of investing in U.S.-listed China stocks created from reverse mergers: On Tuesday the Securities and Exchange Commission suspended trading in China Energy Savings (CESV).

This was a China-based company from the reverse-merger class of 2004 that made its way into the Russell 2000 as its stock zoomed as high as nearly $30 before it was delisted in February at $7; it's now just pennies.

According to the SEC order (.pdf), there is concern whether the company's CEO ever existed.