(Westlaw) The Securities and Exchange Commission on September 5 said it has established a new task force to strengthen the enforcement division’s efforts to identify and combat cross-border fraud, particularly violations of federal securities laws involving foreign companies.
Focusing on international fraud investigations, the Cross-Border Task Force will crack down on market manipulation schemes, such as “pump-and-dump” and “ramp-and-dump” activities that harm U.S. investors. It will also investigate potential violations by foreign companies operating in jurisdictions 6 such as China 6 where governmental control and other factors create unique risks for investors.
The task force will also focus enforcement efforts on auditors, underwriters, and other gatekeepers who facilitate foreign companies’ access to U.S. capital markets.
In a statement, SEC Chair Paul Atkins said the commission will not tolerate companies, intermediaries, gatekeepers, or exploitative traders who attempt to circumvent U.S. investor protections across international borders.
“This new task force will consolidate SEC investigative efforts and allow the SEC to use every available tool to combat transnational fraud,” he added.
The SEC’s divisions of Corporation Finance, Examinations, Economic and Risk Analysis, and Trading and Markets, as well as its International Affairs Office, have also been asked by Atkins to recommend additional measures, such as new disclosure guidance and rule changes, to strengthen protections for U.S. investors.