Cross-Border Coordination: How the SEC and FINRA Are Reasserting American Market Dominance
By K. Braeden Anderson
A Shift in Tone and Intent
The formation of the SEC’s Cross-Border Task Force, announced in Press Release No. 2025-113, marks a defining moment in the intersection of market regulation, geopolitics, and enforcement. This initiative is not a narrow response to isolated misconduct. It reflects a broader realignment of U.S. regulatory posture, one that treats access to American capital as a privilege tied to national interest rather than a neutral financial transaction.
The move coincides with the administration’s America First Investment Policy, which seeks to recalibrate financial engagement by tightening scrutiny on foreign capital linked to jurisdictions that pose systemic or political risk. The message is straightforward: global participation in U.S. markets is welcome, but only on terms that uphold the integrity of American investor protections.
A Broader National Imperative
In tone and scope, the Cross-Border Task Force fits neatly within a wave of federal initiatives aimed at securing economic borders. The DOJ’s Trade Fraud Task Force, established earlier this year, targets customs evasion and import fraud. Treasury and Commerce have refined investment-screening mechanisms under CFIUS and related programs. Together, these actions form a coordinated strategy that blends enforcement with industrial policy.
For the SEC, this means adapting enforcement tools long used for domestic fraud to transnational threats. Market manipulation, undisclosed state ownership, and accounting opacity are no longer viewed as discrete compliance problems—they are seen as vectors of strategic vulnerability.
Limited but Notable Alignment with Recent Coverage
As Bloomberg Law’s Ben Miller observed in his recent coverage of these developments, the SEC and FINRA’s focus on foreign issuers represents a “cross-border crackdown” that aligns closely with the current administration’s broader economic agenda. His reporting highlights the sharp increase in trading halts and enforcement inquiries involving Asian-based issuers. This development reflects a regulatory consensus that volatility tied to thinly capitalized foreign listings is no longer tolerable.
Miller’s reporting captures the immediacy of these enforcement efforts. I would also add that the underlying trend is the reassertion of regulatory sovereignty after decades of deference to cross-border capital flows.
The Task Force’s Core Mandate
The SEC’s press release describes a three-pronged approach:
Investigate foreign: based issuers for market manipulation, particularly “pump-and-dump” and “ramp-and-dump” schemes amplified through digital platforms.
Scrutinize gatekeepers: auditors, underwriters, and placement agents, that enable questionable listings.
Prioritize jurisdictions where governmental control or systemic opacity creates unique investor risks.
Chairman Paul S. Atkins was explicit: the Commission welcomes foreign issuers, but “will not tolerate bad actors” who exploit jurisdictional distance to evade accountability. Division of Enforcement Director Margaret A. Ryan echoed that sentiment, calling the initiative a consolidation of investigative expertise across the agency.
Political Pressure and Structural Reform
The timing of the task force was not accidental. Throughout 2025, members of Congress and state financial officers urged the SEC to heighten oversight of foreign listings, especially Chinese companies trading on major U.S. exchanges. Letters from both Republican and Democratic lawmakers cited concerns about state influence, audit opacity, and national-security implications.
Chairman Atkins later signaled that the Commission is reviewing the special accommodations historically afforded to foreign private issuers. These could include new listing thresholds, foreign trading volume minimums, or limits on reliance upon offshore audit affiliates. Each of these measures would narrow the regulatory gap between domestic and foreign reporting standards.
Learning from the Past: Reverse Mergers and SPAC Parallels
The market has seen this movie before. In the early 2010s, the SEC confronted a surge of Chinese reverse-merger listings that bypassed the traditional IPO process and resulted in a series of accounting frauds and delistings. A decade later, many of the same vulnerabilities have reappeared through SPAC transactions and micro-cap offerings structured through offshore vehicles.
The difference this time is institutional memory. The SEC’s enforcement staff has now spent years investigating FCPA violations, foreign accounting frauds, and unregistered intermediaries. The Cross-Border Task Force gives these lessons a unified home.
Global Cooperation and Parallel Actions
The crackdown is not confined to Washington. FINRA is conducting parallel sweeps of broker-dealers involved in small-cap offerings for foreign issuers, emphasizing diligence failures and deficient AML programs. The Nasdaq has proposed raising the minimum offering size for foreign IPOs and accelerating delisting procedures for issuers exhibiting manipulation risk.
Abroad, regulators are following suit. Hong Kong’s Securities and Futures Commission is seeking to amend its powers to directly prosecute insider trading tied to overseas securities, a reform that will almost certainly lead to more joint investigations with U.S. authorities.
Enforcement in Practice: From Prevention to Containment
The Cross-Border Task Force’s likely priorities reflect a familiar but evolving playbook:
Market Manipulation. Coordinated campaigns using social media or group messaging apps to inflate thinly traded stocks.
Accounting Fraud. Inflated revenues, premature recognition, and offshore subsidiaries designed to mask losses.
Audit Evasion. Firms located in jurisdictions where inspection rights remain limited, including Hong Kong and mainland China.
Broker-Dealer Failures. Repeated deficiencies in filing Suspicious Activity Reports and failing to investigate red-flag trading patterns.
Cross-Border Insider Trading. Misuse of confidential information detected through the SEC’s expanding analytics capabilities.
Each area represents an attempt to preempt misconduct rather than merely react to it. The task force’s goal is not simply to punish wrongdoing but to isolate systemic vulnerabilities before they can destabilize markets.
Strategic Enforcement and Regulatory Realignment
The SEC’s initiative also fits a broader pattern of administrative reorganization. Over the past decade, successive Commissions have created specialized units, the Retail Strategy Task Force, the Climate and ESG Task Force, the Financial Reporting and Audit Task Force, each responding to an emerging area of risk. The Cross-Border Task Force continues that tradition, but with a distinctly geopolitical flavor.
In effect, the SEC is repositioning itself as both a financial regulator and a guardian of national capital integrity. This is enforcement as strategy: an acknowledgment that market transparency and national competitiveness are now intertwined.
The Compliance Imperative for Global Market Participants
For issuers, auditors, and intermediaries, this evolving environment demands rigorous self-assessment. Firms should assume that U.S. regulators expect full access to audit work papers, clear beneficial-ownership disclosures, and robust internal controls. Gatekeepers, particularly underwriters and placement agents, will need to document diligence in greater depth than ever before.
Compliance programs that once relied on geographic distance or fragmented oversight are now outdated. Jurisdictional opacity no longer offers insulation; it invites scrutiny.
The Takeaway
The Cross-Border Task Force represents more than a shift in enforcement, it signals a change in philosophy. The United States is not retreating from global capital markets. It is redefining the terms of participation.
The SEC and FINRA are making clear that transparency, accountability, and reciprocity are the new price of admission. This is not a retrenchment but a recalibration, one intended to restore confidence in the world’s deepest capital market while reaffirming its independence.
Foreign issuers willing to meet these expectations will find continued opportunity. Those that do not will find the door closing fast.
Sources:
U.S. Securities and Exchange Commission, Press Release No. 2025-113, “SEC Announces Formation of Cross-Border Task Force to Combat Fraud” (Sept. 5, 2025).
Ben Miller, “SEC, FINRA Cross-Border Crackdown Typifies Trump 2.0 Priorities,” Bloomberg Law (Nov. 4, 2025).
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