SEC chairman warns of China-linked ramp-and-dump activity

The Securities and Exchange Commission has announced enforcement actions against stocks it suspects are involved in "pump-and-dump" or "ramp-and-dump" schemes tied to foreign-based companies, including entities with operations in China. SEC Chairman Paul Atkins said the agency is intensifying its crackdown on these manipulative practices to protect U.S. investors.

In September 2025, the SEC announced the formation of a Cross-Border Task Force within its Division of Enforcement to investigate potential violations of U.S. securities laws by foreign-based companies, including market manipulation. Atkins said the agency began investigating one such case as recently as last week.

Atkins said the SEC has seen a rise in so-called "ramping-and-dumping" schemes, in which prices are artificially inflated before insiders sell their shares at elevated levels. These manipulative practices can leave retail investors with significant losses.

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"Especially it's some East Asia, China-related, companies where they're small, kind of penny stocks on Nasdaq," said Atkins Friday on "Mornings with Maria."  

Atkins pointed to a recent investigation involving a New York Stock Exchange-listed company, where trading was halted after the firm failed to provide a satisfactory explanation for a sudden spike in its stock price.

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He said the company informed regulators that it had no material news or information that would explain the unusual rise in its stock price.

"So we halted that. New York Stock Exchange is investigating it. So hopefully, you know, we'll get to the bottom of that," he added. 

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The SEC’s Cross-Border Task Force announced it would focus on "investigating potential U.S. federal securities law violations related to foreign-based companies," including market manipulation schemes like pump-and-dump and ramp-and-dump. It also will scrutinize gatekeepers such as auditors and underwriters that assist these companies in accessing U.S. capital markets.

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"We welcome companies from around the world seeking access to the U.S. capital markets," said Atkins during the task force announcement. 

"But we will not tolerate bad actors – whether companies, intermediaries, gatekeepers or exploitative traders – that attempt to use international borders to frustrate and avoid U.S. investor protections," he continued.