The integrity of our markets requires the SEC to protect retail investors in the U.S. from Chinese companies that are outright frauds.
WASHINGTON – The American Securities Association (ASA) sent a letter to the Securities and Exchange Commission (SEC), ahead of today’s Emerging Markets Roundtable, highlighting risks to American retail investors from Chinese companies and urged the Commission to take action to end China’s fraud on our markets.
“The ASA has been a leading voice for years warning policymakers and investors about the dangers of U.S.-listed Chinese firms that fail to follow the basic regulatory standards that U.S. companies must comply with,” said ASA CEO Chris Iacovella. “The integrity of our markets requires the SEC to protect retail investors in the U.S. from Chinese companies that are outright frauds, arms of the Chinese Communist Party, engaged in child labor practices, or activities that are hostile to American interests.”
In the letter, ASA also outlined its support for the Holding Foreign Companies Accountable Act, sponsored by Senator Kennedy (R-LA) and Senator Van Hollen (D-MD). “The swift passage of the Senate bill – and expected consideration in the House of Representatives – was necessary due to the failure of the SEC and other government agencies to properly address this issue,” Iacovella wrote. “Compounding this problem is the existence of a loophole that allows passive investment funds to steer investor dollars into these opaque businesses.”
Iacovella urged the Commission to take action to end China’s fraud on our markets, writing, “The SEC should: 1) terminate the 2013 agreement; 2) delist every Chinese or other foreign company that doesn’t meet the same company-specific disclosure, audit, and reporting standards as U.S. companies; and 3) close the passive index loophole which allows index funds to steer investor money into foreign companies that fail to live up to U.S. standards.”
To read Iacovella’s recent RealClearPolitics op-ed urging Washington to end China’s fraud on our markets, click here.
ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.