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Private corporations seeking to go public can sidestep the usual, attendant scrutiny of their compliance programs while also keeping any legal and regulatory problems under wraps by entering into a controversial type of merger with smaller, thinly traded companies. The reverse merger, as the process is called, usually consists of small, dormant, publicly listed businesses—variously described as shell companies or "shelf" companies—acquiring larger, private companies, paving the way for the latter to access capital without undergoing extensive due diligence or making the disclosures demanded of an initial public offering, or IPO. "In a reverse merger, the minnow essentially acquires the...