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Sen. Cramer, Colleagues Call on SEC to Enforce Transparency Laws for Chinese Companies

Source: United States Senator Kevin Cramer (R-ND)

WASHINGTON – U.S. Senator Kevin Cramer (R-ND), a Senate Banking Committee member, joined Senators Dan Sullivan (R-AK) and John Kennedy (R-LA) on a letter to Chairman of the U.S. Securities and Exchange Commission (SEC) Gary Gensler demanding the SEC implement and enforce the unanimously-passed Holding Foreign Companies Accountable Act, a bill Senator Cramer cosponsored last Congress which ensures foreign companies traded in the United States are subject to the same independent audit requirements that apply to American companies.

“With the recent crackdown by the Chinese Communist Party (CCP) on Chinese companies listed on U.S. securities exchanges, we write as concerned U.S. Senators on behalf of American investors to demand immediate and robust action by the SEC,” the senators wrote. “This should begin with the expeditious implementation and enforcement of the Holding Foreign Companies Accountable Act and thorough investigations of U.S. listed Chinese companies’ concerning lack of transparency.”

In addition to implementing their legislation, the senators’ letter recommends the SEC undertake the following actions:

  • launch investigations into Chinese companies and their underwriters to combat potential fraud and reporting oversights.
  • investigate the potential risks of VIE structures used by Chinese companies to U.S. investors.
  • consider efforts to coordinate strengthened compliance standards among U.S., European, and Japanese stock exchanges to prevent prospective or delisted Chinese companies from trying their luck in the other prominent markets. 
  • investigate index providers doing business in the United States that continue to add Chinese companies to their products despite less and less transparency about these very companies.

Senators Cramer, Kennedy, and Sullivan are joined on the letter by Senators Marsha Blackburn (R-TN), Tom Cotton (R-AR), Bill Hagerty (R-TN), and Rick Scott (R-FL).

Click here to read the letter.