Feeds

Feds probe triggers Chinese tech stock tumble

DOJ joins SEC and FBI in irregularities inquiry

Choosing a cloud hosting partner with confidence

Chinese tech companies' stock has been sliding on the NASDAQ today, after a report that the US Department of Justice (DOJ) is investigating accounting irregularities at US-listed Chinese firms.

Youku, the Chinese YouTube, was particularly hard hit, down 18.3 per cent to $16.24, while search behemoth Baidu lost 9.17 per cent and online media company Sina dropped 9.7 per cent. Other Chinese stocks listed on US exchanges dropped as well.

The Securities and Exchange Commission (SEC), with the help of the FBI, has already had its nose in a number of Chinese firms, looking at the accounting practices of those who got on the market through a reverse merger. This is where a private company acquires a public shell company and reverse merges into it, thereby getting a listing without having to go through the long process of going public.

Around 25 Chinese companies have disclosed discrepancies in their filings or seen their auditors withdraw in the first half of this year, adding fuel to the fire.

The entry of the DOJ into the investigation could mean that criminal charges might be brought as well as civil proceedings. However, the US does not have an extradition treaty with China, so any criminal charges could prove difficult to prosecute.

"There are parts of the Justice Department that are actively engaged in this area," Robert Khuzami, director of enforcement at the SEC, told Reuters in an interview.

He added that a number of federal prosecutors around the US were taking part in the investigation, but didn't name them. ®

Remote control for virtualized desktops

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
UK.gov pushes for SWIFT ACTION against nuisance calls, threatens £500k fines
DCMS seeks lowering of legal threshold to fight rogue firms
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
Hungary's internet tax cannot be allowed to set a precedent, says EC
More protests planned against giga-tariff for Tuesday evening
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
ISPs handbagged: BLOCK knock-off sites, rules beak
Historic trademark victory, but sunset clause applies to future blocks
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
How to simplify SSL certificate management
Simple steps to take control of SSL certificates across the enterprise, and recommendations centralizing certificate management throughout their lifecycle.