Counsel Michael Campoli, a member of Pryor Cashman's Corporate Group, was quoted in the October 4, 2012 Law360 article, “UK Hits Same Snags As SEC With Reverse-Merger Rules.” The article discusses plans by financial regulators in the United Kingdom to place new barriers on foreign companies that use reverse mergers to list on London exchanges.

The move mirrors similar measures put in place last year by the U.S. Securities and Exchange Commission (SEC), causing experts to believe tht the U.K.’s anti-fraud rules will suffer the same difficulties that plague the U.S. crackdown. These issues include Chinese secrecy laws, which generally bar China-based auditors from turning over information about their clients.

According to Campoli, despite the best efforts of the SEC and U.K.’s Financial Services Authority, the roadblock presented by China’s stringent secrecy laws cannot be resolved through simple rule-making. “I would assume that the U.K. would run into the same problems that you find with the SEC, because those problems are primarily related to China or to the host country itself,” he said. In addition, Campoli noted that while U.K. regulators will have no trouble delisting firms it suspects of fraud and bringing enforcement actions, they will inevitably run into problems during the crucial discovery phase of litigation.

To read the entire Law360 article please click here.