U.S. Bankers + Chinese Firms- the stuff that Ultimate Capitalism is made of

Reverse Mergers Give Chinese Firms a Side Door to Wall St. - NYTimes.com: "How companies like Rino wormed their way into the temples of American capitalism is a story for these financial times. Even amid the wreckage of the 2007-8 financial collapse, an ecosystem of Wall Street enablers — bankers, lawyers, entrepreneurs, auditors — spirited Chinese companies to the United States. With some deft financial maneuvers, these businesses essentially went public while sidestepping the usual rules. Before long, many were trading on the Nasdaq stock market, alongside the likes of Google.

It was all perfectly legal. With bankers’ help, the Chinese companies executed what are known as reverse mergers. They bought American companies that were merely shells and assumed those companies’ stock tickers — sort of the Wall Street equivalent of “Invasion of the Body Snatchers.” The strategy let them avoid reviews with state and federal regulators that are normally required for initial public stock offerings.

At issue now is who should bear responsibility for the bursting of yet another Wall Street bubble. Should it be the Chinese executives and their bankers, who engineered the deals and celebrated these companies? Or should it be the investors, who bought these stocks when, in hindsight, the risks seemed clear enough? The lawsuits are flying."