China Reverse Merger Litigation Update

Here’s an update about what’s going on with litigation related to China Reverse Mergers. China MediaExpress Holdings Inc., which went public in the U.S. through a reverse merger, was a fraudulent enterprise, a Hong Kong arbitration panel ruled, awarding Starr International Co. as much as $77 million in damages. CME’s shares have been delisted.

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Using Social Media to Release Information about your Company

Can a posting on Facebook ever satisfy the requirements of Regulation FD? We conclude that in almost every case it cannot. We recommend that in every case in which previously non-disclosed information is posted on a social media site, whether it be Facebook, LinkedIn or Twitter, that the posting be made part of a press release simultaneously issued by the company and simultaneously filed as Regulation FD information on Form 8-K.

We also caution all of our clients to be careful about how they present the information. Our advice is always: Consider what the SEC would say if you put the information in your press release [or social media posting] in an S-1 registration statement reviewed by the staff. If the staff wouldn’t like what you say or how you say it in an S-1, you shouldn’t be saying it in a press release either. We urge all of our clients to have all press releases and postings reviewed by us for input on this matter.

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