SEC Launches Cross-Border Fraud Task Force, Signaling An Initial Focus On China

On September 5, 2025, the U.S. Securities and Exchange Commission (“SEC”) announced the formation of a Cross-Border Task Force within its Division of Enforcement. According to the SEC, the initiative is intended to strengthen and coordinate its efforts to identify and combat fraud that crosses national borders and harms U.S. investors. This is the first major enforcement initiative under the SEC’s newly appointed Enforcement Director, Judge Meg Ryan.

The Cross-Border Task Force will reportedly focus initially on potential violations of securities laws by foreign companies, targeting alleged “pump-and-dump” and “ramp-and-dump” schemes among other forms of securities fraud that may misuse access to U.S. capital markets; but the SEC also indicated that gatekeepers—such as auditors and underwriters—will receive heightened scrutiny where their work could facilitate accounting or disclosure fraud by foreign companies. The Task Force announcement specifically highlighted risks associated with companies operating in jurisdictions where governmental control or data-access limitations have historically impeded U.S. oversight, with China cited as an example, which revives long-simmering tensions between the SEC and Chinese regulators that have previously resulted in China-based audit firms and listed companies being caught in the cross-hairs.

Given the announcement, non-U.S. companies—especially in China but also in other jurisdictions—who regularly transact in U.S. capital markets should anticipate increased regulatory coordination and potential requests for information or documentation from both U.S. and foreign authorities. The SEC has directed multiple divisions—including Corporation Finance, Examinations, Economic and Risk Analysis, and Trading and Markets, as well as the Office of International Affairs—to support the Cross-Border Task Force and consider additional actions, such as updates to disclosure guidance and rulemaking.

Thus, while the announcement did not reflect any substantive changes in regulation or interpretation, there may be more to come. In the meantime, to mitigate risk, foreign private issuers should consider taking the opportunity to review and strengthen their internal controls, financial reporting processes, and disclosure practices, with particular attention to audit documentation and data-retention protocols that may be subject to U.S. regulatory demands. And U.S.-based underwriters and auditors involved in cross-border transactions should consider revisiting diligence programs, engagement letters, and work-paper preservation policies to help mitigate exposure. More broadly, entities with any nexus to foreign listings or trading activity should continue to monitor SEC rulemaking and be prepared to demonstrate proactive compliance steps as the Task Force ramps up its operations.