Beijing Can No Longer Skirt the SEC Regulations
Commentary
The days of a double standard for China are ending. Chinese companies will no longer be able to skirt Securities and Exchange Commission (SEC) audit rules and take advantage of American investors.
There are over 250 Chinese companies listed on U.S. securities exchanges, with a combined value of over $1 trillion. They have been able to violate U.S. law until now. The Sarbanes-Oxley Act of 2002 was meant to protect American investors from investing in firms with fraudulent financial reporting. To achieve greater transparency, Sarbanes-Oxley imposes rigid recordkeeping requirements and strict rules regarding the types of accounting firms and auditors that companies can use. The behavior of corporate officers is also restricted under the act, and persons involved in falsifying the data of publicly traded companies or otherwise violating securities laws can incur criminal penalties. Firms failing to comply with audit rules can be delisted….