Senator Rick Scott has sent a letter to Paul Atkins, President Trump’s nominee to lead the Securities and Exchange Commission (SEC), urging him to take immediate action against Chinese companies operating on U.S. exchanges that fail to comply with American financial regulations.
In the letter, Senator Scott thanked Atkins and President Trump for their commitment to protecting the integrity of U.S. markets and investors. He highlighted the persistent issue of Chinese companies disregarding U.S. laws and the previous SEC Chairman Gary Gensler’s alleged inaction on this matter.
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Senator Scott emphasized the importance of the Holding Foreign Companies Accountable Act (HFCAA), passed in 2020, which requires the SEC and the Public Company Accounting Oversight Board (PCAOB) to identify foreign companies that cannot be inspected by U.S. regulators. The HFCAA mandates the delisting of companies that fail to comply with reporting requirements for two consecutive years.
“According to recent reports, Chinese companies listed on U.S. Exchanges continue to disregard SEC accounting standards and compliance deadlines required under the HFCAA,” Senator Scott wrote. “These standards are set to provide financial transparency and ensure every company listed on our exchanges is accurately disclosing the necessary business information needed to invest with prudence.”
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The U.S.-China Economic and Security Review Commission (USCC) reports that 286 Chinese companies, with a market capitalization exceeding $1 trillion, are listed on U.S. exchanges. Senator Scott expressed concern about the potential risks to American investors due to the lack of enforcement of the HFCAA.
“The Biden-Harris administration’s lack of enforcement of the HFCAA was deeply troubling and cannot continue,” Senator Scott stated. “This inaction has effectively allowed Chinese companies to continue trading on U.S. Exchanges without making the necessary financial disclosures, potentially putting American investors at risk.”
Senator Scott called upon Atkins to commit to combating Chinese companies’ defiance of financial disclosure and reporting requirements, fully enforcing U.S. financial accounting standards, and prioritizing America’s financial security.
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“Promoting the integrity of our financial markets must be one of your top priorities. American investors deserve protection, and all companies trading on our exchanges must be held to the same standards of transparency and accountability,” Senator Scott concluded.
He expressed his eagerness to discuss Atkins’ plans to enforce U.S. laws and protect investors following his confirmation.
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