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'Securities regulators charged a New Jersey-based consultant on Tuesday with defrauding investors in the China-based companies he helped make public through a backdoor method known as a "reverse merger."

The Securities and Exchange Commission charges against Huakang "David" Zhou and his firm, Warner Technology and Investment Corporation, is the latest action by the SEC as cracks down following a rash of accounting scandals at U.S.-listed Chinese companies.'

'The SEC alleges Zhou located more than 20 private companies in China and helped them gain access to U.S. capital markets. Zhou then turned around and violated a slew of securities laws ranging from failing to disclose certain holdings to "outright fraud," the SEC said.

An attorney for Zhou could not be immediately reached for comment.

The agency said Zhou earned millions of dollars in consulting fees by helping companies that later had major problems, such as China Yingxia International Inc, which collapsed in 2009 amid reports its chief executive had committed fraud.

"Zhou and his firm sought to take advantage of our financial markets by propping up some Chinese issuers with the sole purpose of enriching themselves at the expense of U.S. investors," said Andrew Calamari, the director of the SEC's New York Regional Office.'
http://www.reuters.com/article/2012/12/11/us-china-consultan...

propping up some Chinese issuers with the sole purpose of enriching themselves at the expense of U.S. investors
Ya think?
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