Senator Young urges SEC chair to safeguard US economy and national security against Chinese threats

In a recent communication to Securities and Exchange Commission (SEC) Chair Paul Atkins, U.S. Senator Todd Young from Indiana highlighted issues concerning the Chinese Communist Party (CCP) and its impact on global financial markets. The letter expressed worries about the CCP’s manipulation of financial markets and evasion of U.S. financial regulations. Senator Young urged the SEC to take necessary measures to safeguard American markets, shareholders, as well as economic and national security interests.

The letter emphasized the risks posed by Chinese companies traded on U.S. exchanges to American investors and fiduciaries. Senator Young raised concerns about the lack of transparency, poor corporate governance, fraudulent behaviors, and potential threats of regulatory actions by Chinese authorities associated with these corporations. He pointed out that Chinese companies face fewer consequences for misconduct compared to what U.S. regulators could enforce, creating a significant challenge for American investors and firms.

With operations, supply chains, and business relationships in mainland China and Hong Kong, American investors, fiduciaries, and publicly-traded companies often encounter challenges due to the lack of transparency, fraudulent activities, and arbitrary actions by the CCP. Failure to address these issues poses a threat to America’s economic and national security interests.

This communication was not the first of its kind from Senator Young. Previously, he had raised similar concerns in a letter to the former SEC Chair, who was appointed by President Biden in June 2023. However, despite those efforts, the Biden Administration did not take appropriate action. As of recent data from the U.S.-China Economic and Security Review Commission, there are now 286 Chinese companies listed on prominent U.S. stock exchanges, with a combined market capitalization exceeding $1.1 trillion, signifying a significant presence of Chinese corporations in American financial markets.

The implications of Chinese companies’ activities on U.S. exchanges are profound. The lack of transparency, questionable governance practices, and potential regulatory risks from Chinese authorities present serious challenges for American investors, firms, and national interests. Hence, addressing these concerns is vital to protecting the integrity of American markets and ensuring the security of investments made by U.S. investors in Chinese companies.

Senator Young’s letter to the SEC Chair serves as a reminder of the urgent need to address the complexities surrounding Chinese companies traded on U.S. exchanges. By urging the SEC to explore additional protective measures, Senator Young underscores the importance of safeguarding American economic and national security interests from potentially harmful foreign influences in financial markets.