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By Ronald D. Eagle, MarketWatch

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WASHINGTON (MarketWatch) – Top U.S. stock market on Monday, the Commissioner stated that concern over the recent past, when private companies to merge with a fictional company as a flotation device.

“This is a disturbing trend in the capital, and investor protection, the Commissioner said the Securities and Exchange Commission, Luis Aguilar, the event was hosted by institutional investors.

Aguilar, one of three Democratic SEC commissioner, concerns about the trend of so-called “backdoor” listings, where a private company seeking to go public funds injected into the dormant shell company and the new capital.

He noted that since 2007, hundreds of such records in the United States, including more than 150 companies from China and the Chinese territory. Nasdaq has recently suspended trading in some of these companies.

China Sky One Medical
/ quotes/comstock/15 *! CSKI / loans / nls / CSKI
( CSKI
3.32
-0.14
-4.05% )
and China Green Agriculture
/ quotes/comstock/13 *! CGA / loans / nls / CGA
( CGA
7.07
0.06
0.86% )
are shell companies in the stock market drops in recent months.

“We still have problems with shell companies. Although the majority can be a legitimate business, a growing number have proved to be an important accounting issues,” Aguilar said.

He added that the SEC has created an internal working group to examine fraud in overseas companies listed on stock exchanges in the U.S., including companies engaged in the back door registration.

“The working group produced and still produce results,” he said.

Aguilar added that Chinese companies, which employ a backdoor approach to listing the American Stock Exchange have raised certain questions, which are responsible for overseeing.

“It appears that concerns about systematic quality auditing and financial reporting,” he said. “Even though these companies are registered trademarks in the U.S., we have our own limitations in terms of monitoring the U.S. Securities Act with them.”

To illustrate his concern, Aguilar said, the SEC and private companies may be more difficult to monitor remedial measures, and investors back into the loss when it comes to the back door moldings.

“Persons and Punishment of the property, which can meet the conviction may be located outside the United States and is harder to get,” he said. “Appeals from the United States may not be enforceable in other countries, where most of the property.”

Aguilar also said he would focus more on traditional modes of venture capital, insisting that the traditional system iInitial public offering in the United States, “is the gold standard.”

“SEC and the public receives clear information and the time to review the material,” he said. Read the back door moldings
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Ronald D. Eagle is a reporter for MarketWatch, which is in Washington.