"SEC Unveils Global Fraud Fight: Task Force Targets Cross-Border Schemes"

The U.S. Securities and Exchange Commission (SEC) has established a Cross-Border Task Force aimed at enhancing its enforcement capabilities to detect and combat fraudulent schemes involving foreign-based companies. The task force, announced on a recent Friday, will specifically target transnational market manipulation tactics such as “pump-and-dump” and “ramp-and-dump” strategies that exploit U.S. investors. It will also scrutinize the role of intermediaries, including auditors and underwriters, who facilitate the access of foreign companies to U.S. capital markets [1].

The formation of the task force represents a strategic consolidation of the Division of Enforcement’s resources to address cross-border violations of U.S. securities law. SEC Chairman Paul S. Atkins emphasized the agency’s commitment to upholding investor protections, even as it continues to welcome global companies to U.S. markets. “We will not tolerate bad actors—whether companies, intermediaries, gatekeepers, or exploitative traders—that attempt to use international borders to avoid U.S. investor protections,” Atkins said in a statement. This initiative also aligns with broader efforts to enhance transparency and accountability for foreign private issuers [2].

The task force is expected to focus on jurisdictions where unique investor risks arise, such as in some foreign countries with government-controlled economies. These risks often complicate regulatory oversight and expose U.S. investors to potential fraud. The SEC has directed other divisions, including the Office of International Affairs and the Division of Corporation Finance, to explore complementary actions such as updated disclosure rules and potential regulatory reforms. These measures aim to close loopholes that may be exploited by unscrupulous actors in foreign markets [1].

The announcement comes amid heightened regulatory scrutiny of foreign-listed companies in the U.S., particularly those with ties to jurisdictions where governance structures differ significantly from U.S. standards. In recent months, Nasdaq has also taken steps to tighten its listing requirements, aiming to reduce volatility and improve oversight of foreign firms on its exchange. These parallel efforts suggest a growing regulatory consensus on the need for more robust mechanisms to safeguard U.S. capital markets from transnational risks [2].

The task force’s formation also underscores the SEC’s broader enforcement priorities under the Trump administration. By focusing on foreign securities fraud and market manipulation, the agency is reinforcing its role as a global watchdog for investor protection. Division of Enforcement Director Margaret A. Ryan highlighted that the task force will leverage specialized resources and expertise to detect and address fraudulent behavior in international markets. This strategic approach is expected to enhance the SEC’s ability to respond to increasingly complex cross-border schemes [1].

The SEC’s initiative aligns with recent industry and regulatory developments, including a request for public feedback on revising rules for foreign private issuers. These revisions could reduce preferential treatment in disclosure and reporting requirements, ensuring U.S. investors receive consistent and comparable information regardless of the origin of the listed entity. While the task force is still in its early stages, its formation signals a clear intent to strengthen U.S. capital market integrity and investor confidence in the face of evolving global financial risks [2].

Source:

[1] SEC Announces Formation Cross-Border Task Force to Combat Fraud (https://www.sec.gov/newsroom/press-releases/2025-113-sec-announces-formation-cross-border-task-force-combat-fraud)

[2] SEC Launches Task Force on Securities Fraud by Foreign Companies (https://finance.yahoo.com/news/sec-launches-task-force-securities-185603248.html)