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The SEC said the bad trades included matched orders, where accounts sold shares to each other at the same time and for the same price. They also included wash trades which resulted in no real change of ownership of the shares, it said. Many of the trades were done through the same computers or computer networks, it said. Several of the defendants named in the SEC lawsuit are relatives of AutoChina's chairman and founder, Yong Huili, who was not named in the lawsuit. The SEC said several others are AutoChina employees, according to trading account registrations. The SEC said stock trading accounts of the defendants made up to 70 percent of trading in AutoChina's shares, raising the average number of shares changing hands each day from about 18,000 to 139,000. The SEC crackdown on market abuses and shady accounting practices is prompting some companies to withdraw from the U.S. market or refrain from share offerings, while others battle to contain the damage. Chinese timberland company Sino-Forest Corp., which is being investigated for fraud, filed last month for bankruptcy protection, putting itself up for sale. It also is pursuing a lawsuit against short-seller Muddy Waters Research and its research director Carson Block, as well as others who have accused the company of fraud. Allegations Sino-Forest exaggerated its timber holdings in China, helped set off a slew of complaints over foreign-based companies. In a report released Thursday, PwC U.S. said it found that the number of class action lawsuits filed against foreign issuers of securities rose 126 percent in 2011 over the year before, with 61 percent against China-based companies. Most involved companies that listed shares through reverse takeovers, a backdoor procedure that enables a company to list shares by buying a shell company that is already listed, without going through the more rigorous process of an initial public offering. The report also said China-based companies were the target of 39 percent of accounting-related cases in 2011.
[Associated
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