Overview

• Announced on September 5, the task force coordinates Enforcement with Corporation Finance, Examinations, Trading and Markets, Economic and Risk Analysis, and the Office of International Affairs to pursue foreign-linked securities violations.
• The initiative prioritizes “pump‑and‑dump” and “ramp‑and‑dump” schemes that use social promotion, trading activity, nominee accounts, offshore intermediaries, and layered structures to conceal control and profits.
• Auditors and underwriters face heightened scrutiny as gatekeepers, building on PCAOB inspection findings at Chinese firms under the HFCAA framework and longstanding SEC expectations for due diligence and professional skepticism.
• China features prominently due to transparency and oversight concerns, with parallel pressure points that include DOJ actions and Nasdaq’s move to tighten standards following suspected manipulation in small U.S.-listed Chinese stocks.
• Chair Paul Atkins tasked multiple divisions to consider new disclosure guidance and potential rule changes, and legal advisories are urging issuers and intermediaries to strengthen KYC/AML, due diligence, and monitoring for red flags.