Exclusive: Pompeo calls Nasdaq's strict rules a model to guard against fraudulent Chinese companies
By Humeyra Pamuk WASHINGTON (Reuters) - U.S. Secretary of State Mike Pompeo on Thursday warned American investors against fraudulent accounting practices at China-based companies and said the Nasdaq's recent decision to tighten listing rules for such players should be 'a model' for all other exchanges around the world
By Humeyra Pamuk
WASHINGTON (Reuters) - U.S. Secretary of State Mike Pompeo on Thursday warned American investors against fraudulent accounting practices at China-based companies and said the Nasdaq's recent decision to tighten listing rules for such players should be "a model" for all other exchanges around the world.
His remarks on the issue, reported first by Reuters before being delivered via a statement, illustrate the Trump administration's desire to make it harder for some Chinese companies to trade on exchanges outside of China.
President Donald Trump issued a memorandum on Thursday calling for recommendations to be issued within 60 days to protect U.S. investors from what he said was China's failure to allow audits of U.S.-listed Chinese companies.
"We must take firm, orderly action to end the Chinese practice of flouting American transparency requirements without negatively affecting American investors and financial markets," Trump wrote.
The statements mark the latest flashpoint in U.S.-China relations at a time of escalating tensions between the world's two largest economies over trade, the coronavirus pandemic and Hong Kong.
"American investors should not be subjected to hidden and undue risks associated with companies that do not abide by the same rules as U.S. firms," Pompeo said in his statement. "Nasdaq’s action should serve as a model for other exchanges in the United States, and around the world."
"I applaud Nasdaq for requiring auditing firms to ensure all listed companies comply with international reporting and inspection standards," Pompeo added.
Nasdaq Chief Executive Adena Friedman said on Thursday addressing the overseas accounting issues is a matter for the U.S. Securities and Exchange Commission (SEC).
The exchange's tightening of listing standards came after Chinese coffeehouse chain Luckin Coffee Inc
Trump said last week his administration would begin the process of eliminating special U.S. treatment for Hong Kong to punish China, saying Beijing's move to impose new national security legislation meant the territory no longer warranted U.S. economic privileges.
He also said he was instructing a presidential working group to study the differing practices of Chinese companies listed on the U.S. financial markets, with the goal of protecting American investors.
"The real issue is the lack of transparency and the lack of disclosure to the American investors," Keith Krach, undersecretary for economic growth, energy and the environment at the U.S. State Department, told Reuters on Wednesday.
"No country should be allowed to lie to the American investors to create an unfair advantage, especially when operating in American markets," Krach said.
Many U.S.-listed Chinese firms will likely list on the Hong Kong exchange this year, in part because of U.S. political pressure, the head of the exchange said Thursday.
The SEC has been locked in a decade-long struggle with the Chinese government to inspect audits of U.S.-listed Chinese companies.
In April, SEC chief Jay Clayton, warned investors against putting money into Chinese companies due to problems with disclosures.
A senior U.S. official said he hoped the SEC would review a memorandum of understanding signed with China in 2013, allowing Chinese companies to withhold information if their local laws forbid them from sharing it.
"That waiver should probably be reviewed at this point in time as to whether it is still appropriate and if not be rescinded," he said, adding that the decision was up to the SEC.
(Reporting by Humeyra Pamuk; additional reporting by Echo Wang and John McCrank; Editing by Chris Sanders, Edward Tobin, Nick Zieminski and Tom Brown)
This story has not been edited by Firstpost staff and is generated by auto-feed.
(Reuters) -Ximalaya, backed by China's Tencent Holdings, filed for an initial public offering (IPO) in the United States on Friday, cashing in on growing demand as more people tune in to podcasts while staying at home during the pandemic. China's Qiniu Ltd, a cloud-based platform-as-a-service provider backed by Alibaba Group Holding Ltd, also filed paperwork for a U.S. IPO
By Greg Roumeliotis (Reuters) - Donerail Group, an investment firm led by former activist hedge fund Starboard Value LP executive Will Wyatt, has amassed a stake in Turtle Beach Corp and is pushing the maker of gaming headsets to explore a sale, people familiar with the matter said on Friday. The move represents a bet that Turtle Beach could attract acquisition interest from peers such as Corsair Gaming Inc and GN Store Nord A/S, as the video game market continues to benefit from people looking for entertainment options at home during the COVID-19 pandemic
By John McCrank, Saqib Iqbal Ahmed and Lawrence Delevingne NEW YORK (Reuters) - Recent volatility in a handful of so-called meme stocks is putting the spotlight back on the tussle between individual investors and short sellers, months after a wild ride in GameStop captivated Wall Street’s attention. Stocks that have notched big swings this month include laser-manufacturer MicroVision Inc, a favorite on Reddit’s popular WallStreetBets forum, whose shares have risen as much as 170% since April 20 before tumbling in recent days