Overview

• The SEC announced the task force on September 5 as its first major initiative under Enforcement Director Judge Margaret A. Ryan.
• Initial efforts center on social-media-driven pump-and-dump and ramp-and-dump schemes involving foreign issuers, with China cited as a higher-risk jurisdiction due to oversight barriers.
• SEC leadership directed Corporation Finance, Examinations, Trading and Markets, Economic and Risk Analysis, and the Office of International Affairs to support the initiative and to consider updated disclosure guidance and possible rule changes.
• Parallel enforcement is possible with the Justice Department, which on September 12 filed charges in a social-media manipulation case that allegedly generated more than $100 million.
• Nasdaq has proposed tougher listing standards, including higher public float thresholds, faster suspensions for small deficient issuers, and a $25 million minimum offering for companies principally operating in China.