U.S. Firms Linked to Chinese Stock Fraud Under SEC Fire as Nasdaq Tightens IPO Rules

The U.S. Securities and Exchange Commission (SEC) has launched enforcement actions against companies tied to Chinese stock scams. According to a report from the Financial Times, the investigation focuses on firms suspected of taking part in “pump and dump” schemes—artificially inflating stock prices through false news and hype, followed by mass sell-offs at the peak. For everyday investors, the outcome is often painful losses, while organizers of these schemes walk away with huge profits. The SEC’s crackdown is part of a broader campaign to curb cross-border financial fraud that undermines confidence in U.S. markets.

Nasdaq Raises the Bar for IPOs Alongside the SEC’s enforcement push, Nasdaq has rolled out new measures to block questionable companies—especially those operating primarily in China—from accessing U.S. capital markets. Key requirements include: Companies must raise at least $25 million from their initial public offering (IPO)Firms listing under the net income standard must have at least $15 million in publicly traded shares If companies cannot meet these thresholds, they will be denied access to the exchange. Nasdaq has also accelerated the suspension and delisting process for firms with a market cap under $5 million. John Zecca, Nasdaq’s Chief Legal, Risk, and Regulatory Officer, commented: “Investor protection and market integrity are at the core of our mission. These rules give public investors a healthier liquidity profile while opening the door for legitimate growth companies that want to play fair.”

Wall Street Cleans House The new rules have already been approved by the SEC. Firms currently pursuing listings have been given 30 days to comply with the old standards. After that, they must meet the stricter requirements or exit the path to U.S. markets. The joint pressure from the SEC and Nasdaq sends a clear message: American markets will not serve as safe havens for manipulation and fraud.

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