Key Takeaways
- The SEC is focusing on US companies connected to suspected Chinese pump and dump scams.
- Regulatory actions aim to address facilitation or involvement in manipulative trading by American firms.
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The Securities and Exchange Commission is targeting US companies connected to suspected Chinese “pump and dump” schemes, according to a Financial Times report today.
The regulatory action focuses on American firms that may have facilitated or been involved in manipulative trading practices originating from Chinese operations. Pump and dump schemes typically involve artificially inflating a security’s price through misleading marketing before selling shares at the elevated price, leaving other investors with losses when the price collapses.
The SEC’s enforcement actions represent part of broader efforts to crack down on market manipulation schemes that cross international borders and involve US market participants.
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