This article explores reverse mergers, a method commonly used by legitimate businesses and fraudsters alike. Part II provides a historical framework of publicly traded companies by detailing how they first began and exploring how they have evolved. Part III details several reasons a company may decide to go public. Part IV discusses, in detail, three common methods companies use when going public, called initial public offerings, Rule 144 placements, and direct public offerings, and the pros and cons of each method. Part V explores the origin of reverse mergers by explaining what a reverse merger is and exploring how reverse mergers work. Part VI discusses successful public companies that have emerged using reverse mergers. Part VII looks at how fraud is typically perpetuated through the reverse merger process. Part VIII provides specific recommendations on how to toughen the existing regulations. Part IX concludes by exploring the potential impacts of tougher regulations on reverse mergers.
Reverse Mergers: A Legitimate Method For Companies
To Go Public Or An Easy Way To Commit Fraud?,
36 J. Nat’l Ass’n Admin. L. Judiciary
Available at: http://digitalcommons.pepperdine.edu/naalj/vol36/iss1/7