No, Alibaba Isn't a Stock Market 'Reverse Merger' Scam

"The China Hustle," a documentary that premiered this month at the Toronto International Film Festival, starkly details how dozens of Chinese companies allegedly sought to defraud investors via reverse mergers. Simply put, privately held firms that buy public ones can use those deals as a shortcut to turn themselves into public companies, entering the market without undergoing the regulatory scrutiny that's normally required.

The filmmakers detailed how numerous Chinese companies intentionally inflated their revenues, lied to financiers about their service scale, and got themselves listed themselves on U.S. stock markets through less-than-honest means.

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Source: Fool.com