Bridging the information gap: U.S. regulators should protect Chinese public company investors from attacks by short sellers


In recent weeks we have seen a handful of Chinese companies listed on U.S. exchanges involved in significant controversy. Many of these incidents have been triggered by the inability to file timely annual reports, causing our exchanges to halt the trading of these companies or to delist them. However, what is troubling about these events is the common cause behind many of them so-called research reports alleging fraud and overstated financial results as reported by these companies in their Securities and Exchange Commission filings.

What is little-known is that some of the authors of these damaging research reports hold, or have been commissioned by an investor who holds, a short position in the subject company's stock.

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