Reverse mergers could lead to fraud
By Hicbd
Thu Mar 18 2021 9:54 am
"Reverse mergers are even more toxic, by circumventing the entire initial public offering process. Instead of hiring an investment bank to bring a company public, thereby exposing it to the (theoretical, at least) scrutiny of the Securities and Exchange Commission and state regulators, reverse mergers take publicly held "shell" companies that exist mainly on paper, and merge the private company with a comatose shell or bankrupt company. This effectively takes the company public, bringing it into the public domain without all that annoying public-company paperwork -- which has, of course, the not-so-annoying purpose of providing investors with some ostensible protection."
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