The US Securities and Exchange Commission has launched a sweeping crackdown on international fraud, unveiling a new Cross-Border Task Force aimed at combating so-called pump-and-dump and ramp-and-dump schemes linked to overseas companies. According to an SEC press release issued Tuesday, the task force will target not only fraudulent issuers but also the professional gatekeepers—including underwriters, lawyers, and auditors—who may have enabled questionable firms to list in the United States.
As reported by the Financial Times, SEC officials have zeroed in on small professional service providers, sometimes referred to in the industry as "bilge bracket" firms, that facilitated access for Chinese companies seeking U.S. listings. Regulators argue that these firms exploited gaps in oversight and due diligence, making it easier for high-risk issuers to tap American investors.
