In its continuing enforcement onslaught on firms emanating from China, the SEC filed another action in the United States District Court for the Western District of Louisiana against a Chinese company.
The SEC alleged that the company mislead investors regarding its value in a variety of press releases. Further, the SEC claims that a number of the company’s executives had confessed to skimming money from the company’s bank account.
This is yet another case in a long line of cases against these types of companies that were formed in China and used in the United States to raise money. The SEC believes that it has uncovered numerous instances of fraud, and this matter will ultimately be prosecuted.
The SEC is making a statement with this type of case. It is suggesting that, if these companies wish to continue to operate in the United States, they will be subject to strict regulation by the SEC. However, it is unclear as to how these companies will respond.