US regulators have targeted professional services firms alleged to have ties to suspected Chinese “pump and dump” scams as part of a fresh crackdown on cross-border fraud.
A task force launched last week would take aim at US-based “gatekeepers, particularly auditors and underwriters” that facilitate “potential securities law violations related to companies from foreign jurisdictions such as China”, the Securities and Exchange Commission said.
The regulator’s announcement came a day after Nasdaq, the world’s second-biggest stock exchange, outlined plans to tighten trading standards to combat a surge of suspected pump and dumps, in which people with a vested interest artificially inflate a company’s share price before abruptly selling their own stake.