In an unprecedented public statement, the chairmen of the SEC and the PCAOB, along with SEC senior staff, warned investors that disclosures by SEC-registered companies from emerging markets may be incomplete and misleading. The commission’s cross-border regulation, oversight and enforcement—especially for activity from China—can’t be relied upon, the regulators said.
We don’t question the need for skepticism in evaluating companies’ financial disclosures. But the statement might have laid out a plan to address this concern. Instead, the agencies put investors and companies operating in emerging markets, including U.S. companies with foreign subsidiaries, in disclosure limbo by broadly doubting the integrity of the practices in these markets.
‘Enforcement 40’ for 2020
Join Us On LinkedIn
Join the Securities Litigation and Enforcement Group on LinkedIn