A Toronto consultant has agreed to pay $6.22 million (C$6.81 million) to settle U.S. regulatory charges that he helped bring two Chinese companies into U.S. markets through so-called reverse mergers so that he and his associates could manipulate trading and reap millions of dollars of illegal profit. The U.S. Securities and Exchange Commission said the consultant, S. Paul Kelley, and co-defendants Roger Lockhart, Robert Agriogianis and George Tazbaz schemed in 2008 and 2009 to drive up the price of China Auto Logistics Inc and Guanwei Recycling Corp, and then dump their shares.According to the SEC, the four acquired controlling stakes in two shell companies to engineer reverse mergers in exchange for 30 percent to 40 percent of the resulting stock, with their stakes concealed through at least nine Hong Kong companies.It said a fifth defendant, stock promoter Shawn Becker, and others would then tout the Chinese companies' unregistered shares to investors.In a typical reverse merger, a Chinese company buys a U.S. shell company and takes over its stock ticker, allowing it to raise money without the regulatory reviews that newly public companies normally get.
Guanwei Recycling Corp. is engaged in the manufacture and distribution of low density polyethylene (LDPE) and other recycled plastics products, using imported raw material in the form of plastic waste. Shares of GPRC fell by 1.67% or $-0.04/share to $2.35. In the past year, the shares have traded as low as $1.18 and as high as $3.88. On average, 81790 shares of GPRC exchange hands on a given day and today's volume is recorded at 11233.
Source
