Chairman John Moolenaar of the House Select Committee on China and Chairman Rick Scott of the Senate Special Committee on Aging have addressed letters to the U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB). They are seeking an urgent briefing about potential risks faced by American investors due to Chinese companies listed on U.S. stock exchanges.
The focus is a 2022 agreement between Chinese regulators and the PCAOB concerning audit inspections of China-based firms. Despite this agreement, Moolenaar and Scott express concerns about ongoing transparency issues and regulatory oversight gaps.
“The agreement between Chinese securities regulators and the PCAOB allows the CCP government to withhold information from U.S. investors, which concerns us,” they stated. “This arrangement gives us significant concern that American investors are not adequately protected.”
The lawmakers also highlight how Chinese laws require companies to serve state interests, noting, “CCP-linked companies cannot operate independently from the state,” due to national security laws that classify important business information as state secrets.
According to the Holding Foreign Companies Accountable Act (HFCAA), foreign firms whose audits remain uninspected by the PCAOB for two consecutive years should be delisted. However, Moolenaar and Scott emphasize that current arrangements still leave American investors vulnerable.
Their request follows an April 2025 joint hearing examining how the CCP exploits American retirees and undermines national security. Moolenaar and Scott seek clarity on measures U.S. regulators will take to protect investors and ensure transparency from Chinese firms on American exchanges.
