A trend that was all the rage on Wall Street a few years ago has, since the start of 2011, caused much handwringing, paper filing and gavel banging.
In the late 2000s up to last year, reverse-mergers were a popular, perfectly legal way for foreign companies, especially in China, to wedge their feet in the doors of U.S. stock exchanges. The reverse-merger, in which a foreign company purchases essentially the shell of a defunct American company that is still listed on U.S. exchanges, was an easy way for the foreign buyer to enter the market without having to deal with the battery of reviews from state and federal regulators that come with the traditional initial public offering (IPO) route.
