On September 5, 2025, the Securities and Exchange Commission set up a Cross-Border Task Force inside its Division of Enforcement. Its target is suspected fraud by foreign-based companies that raise money or trade in U.S. markets.
China gets the closest look. The task force will give particular attention to companies based there and in other jurisdictions the SEC regards as higher risk, where government influence and similar factors are seen as adding to investor danger. It will still chase the familiar cases, market manipulation and insider trading among them, but with the foreign angle first. The SEC’s announcement said foreign issuers whose shares trade in the United States are often suspected of serving as vehicles for “pump and dump” and “ramp and dump” schemes.
Auditors and underwriters in the frame
Companies are not the only ones under watch. Auditors, underwriters and other professionals who help foreign issuers reach U.S. markets or register securities with the SEC can expect tougher questions about how carefully they did their checks.
The auditor focus follows years of trouble. The SEC has had difficulty obtaining documents, including audit work papers, in investigations of China-based companies. Data-blocking statutes in China are expected to make evidence harder to reach again. A Legal 500 analysis of the move points to other routes: pressing U.S.-based parties such as the national offices of audit firms, or serving subpoenas on individuals while they are traveling in the United States.
Where it fits
The announcement came after a run of related steps. In June 2025 the SEC issued a concept release asking for public comment on whether the definition of foreign private issuer should change, pointing to the growth in Chinese-affiliated variable interest entities on U.S. exchanges. In early September, Nasdaq proposed tighter listing standards, including a minimum public float and a minimum amount raised in IPOs for companies operating mainly in China, plus stricter suspension and delisting procedures.
The task force also matches the priorities of SEC Chairman Paul Atkins and Enforcement Director Margaret Ryan, who have stressed cases that hurt retail investors: manipulation, insider trading, accounting fraud and materially false or misleading disclosures.
Atkins also told several other SEC divisions, among them Corporation Finance, Examinations, Trading and Markets, and the Office of International Affairs, to recommend more protections for investors. Updated disclosure guidance for foreign issuers and possible rulemaking are both on the table. Legal advisers have told foreign issuers to review their accounting and disclosure controls, and told auditors and underwriters to strengthen due diligence for high-risk jurisdictions. There is also a chance the Public Company Accounting Oversight Board steps up its own exams and enforcement for auditors of China-based issuers.
