Advisers' Role In Chinese RTO Cos. — Implications For PE

Law360, New York (August 7, 2012, 5:00 PM EDT) -- A new enforcement action by the U.S. Securities and Exchange Commission against a financial adviser who specializes in assisting China-based businesses that become U.S. public companies through reverse takeovers (RTOs) highlights how such advisers present a distinct — yet often poorly understood — risk for private equity investors. As more and more PE investors look at transactions involving RTO companies, it is crucial that due diligence focus not only on the quality of the underlying business and its management but also on the RTO adviser itself....
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