China MediaExpress: Stocks to Watch in the Wake of This Scandal

Ian Bezek submits:

It's been a bad week for Chinese companies formed by reverse mergers. China Agritech (CAGC) announced the formation of a special committee to investigate allegations against the company and it also dismissed its auditor. China MediaExpress (CCME), whose stock has been halted since Friday, announced Monday afternoon that its CFO has resigned and that its auditor has quit.

Both of these stocks have been vitriolic battlegrounds between longs and shorts. I previously warned investors to avoid China Agritech (CAGC) and I noted the huge skew in the options market suggesting that the smart money thought (correctly) that China MediaExpress was a fraud. Now it is time to look at other Chinese reverse-merger birthed companies that will receive special attention in the wake of the problems with China Agritech and China MediaExpress.

China Biotics (CHBT) -- Citron Research (who correctly called CCME too good to be true) also has been on


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