The heat is on for newly confirmed SEC chairman – Business News
Paul Atkins, President Trump’s nominee because the new chairman of the Securities and Exchange Commission, confronted a key query simply as he was to be grilled during his affirmation this previous week.
Would the long-time securities lawyer and regulator examine Chinese firms for what one senator believes are wanton and blatant violations of US disclosure legal guidelines which have gone unchecked for years?
Atkins stated he would, which helped him squeeze by within the affirmation course of with simply 52 votes.
Paul Atkins takes half in a strategic and coverage CEO dialogue with U.S. President Donald Trump within the Eisenhower Execution Office Building in Washington, U.S., April 11, 2017. REUTERS
That exchange, between GOP Sen. Rick Scott from Florida and Atkins, hasn’t been reported, although The Post has discovered that the often mild-mannered Scott didn’t mince phrases with Atkins.
Scott stated his affirmation vote was contingent on Atkins ramping up scrutiny on Chinese firms — “delisting” and eradicating these suspected of violating US legal guidelines from US exchanges — as quickly as he received into workplace.
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The crackdown can be vital, in all probability one of the most important the SEC has undertaken in its historical past. Nearly 300 Chinese firms, representing more than $1 trillion in market worth, commerce on US markets, specifically the New York Stock Exchange and the Nasdaq Composite.
Many or possibly all of them, relying on whom you communicate with, could possibly be delisted.
The controversy over Chinese firms with public shares trading right here has been brewing for years. Critics consider giving China entry to our markets and public capital has fueled its quest for navy and financial dominance. In 2020 during Trump’s first time period, he signed into law provisions that give regulators the flexibility to delist China Inc. for violations of disclosure guidelines.
Among the issues of lawmakers are that Chinese firms fail to correctly account for Chinese Communist Party affect and possession of their enterprises, and that they use slave labor of dissidents as half of their regular business operations. American traders in China Inc. could have little recourse if they’re defrauded by a rouge nation.
Chinese flags fly above residence buildings in Beijing on April 12, 2025. AFP through Getty Images
Biden’s roadblock
According to congressional sources, efforts to crack down on these alleged abuses had been stymied by the Biden administration, specifically its SEC chief, Gary Gensler, now a business professor at MIT. (Gensler didn’t reply to a request for remark.) The debate was largely confined to assume tanks and the halls of Congress.
No longer. With Trump back within the White House, his commerce conflict is heating up, with a specific emphasis on all issues China. The delisting effort can now choose up steam.
Atkins, who should report not simply to the president however a GOP-controlled Congress for oversight, will likely be underneath strain by Scott & Co. to lastly crack down.
These strikes will put each main US exchanges in a tight spot, of course. The NYSE and the Nasdaq often delist firms piecemeal once they fail to fulfill financial itemizing necessities or are indicted for fraud. Here they’d be chopping out of their stability sheets main tech corporations and retailers, reminiscent of Chinese online retailer Alibaba, that pay a lot of money to commerce within the US and appeal to capital from our markets.
Paul Atkins during a Senate Banking, Housing, and Urban Affairs Committee affirmation listening to in Washington, DC, US, on Thursday, March 27, 2025. Bloomberg through Getty Images
It can be one of essentially the most chaotic company actions the exchanges have ever undertaken, and you’ll’t say the exchanges shouldn’t have seen it coming. The NYSE listed Alibaba even because the as soon as outspoken Jack Ma, its founder, got here underneath the thumb of the Chinese Communist Party. He seemingly disappeared from public view following some minor criticism he made about China’s bank rules.
The itemizing ignored some attention-grabbing language in Alibaba’s “prospectus” (the official doc for the IPO), which discloses “risks related to doing business in the People’s Republic of China,” the place the “economy differs from the economies of most developed countries in many respects including the extent of government involvement . . .”
Here’s what might have prompted blindness to all of the above: The NYSE fees as a lot as $500,000 plus varied further charges for firms like Alibaba (with a market cap of $250 billion). A US itemizing on the famed “Big Board” goes a long approach in getting US traders to buy the stock, at the same time as critics allege these shares finance the financial would possibly of one of essentially the most repressive regimes on Earth.
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A spokeswoman for the NYSE supplied this rationalization: “NYSE is obligated to be nondiscriminatory in the application of its SEC-approved listings standards.”
A press official for Alibaba didn’t return a request for remark. An SEC spokeswoman declined to remark.
The different large US exchange, the Nasdaq, additionally lusted for profitable Chinese company listings, a lot in order that it carved out a loophole in its controversial and now defunct board-diversity guidelines. These guidelines prodded US firms to nominate a sure quantity of ladies, minorities and LGBTQ+ people to boards.
A screen shows the Dow Jones Industrial Average and different closing trading numbers after the closing bell on the ground on the New York Stock Exchange (NYSE) in New York City, U.S., April 11, 2025. REUTERS
It didn’t apply to China Inc. That’s proper, no mandate from the Nasdaq to power Chinese-listed firms to nominate oppressed ethnic and non secular minorities.
Nasdaq had no remark.
End ‘golden shares’
Again, all this is likely to be altering due to Scott’s efforts. He believes US traders ought to know how their money is getting used once they buy a Chinese stock, or an index fund that comprises Chinese public firms. In addition to his pressuring of Atkins (who declined to remark), Scott’s been pushing laws that might search to finish China Inc.’s use of so-called “golden shares.”
That’s a particular sort of stock held by the CCP that he believes offers it control over these firms outdoors of US disclosure guidelines, a charge Alibaba has confronted up to now.
“Scott is obsessed with this issue,” stated one individual close to the senator.
