July 8, 2020
Hi Directors,
The issues are around how you would regulate the emerging market companies and protect the investors.
I.E., in the GSX case, they have received more than 11 reports with strong evidence showing that they are cooking their accounts.
However, their auditors are not liable until the next annual report. We know that in the WireCard or LK case, it was the auditor that revealed the fraud in the end.
Then in the GSX Case, how would you regulate the auditor that is based in China to do their duties? Auditors are not liable then how do you ensure the companies are reporting the right numbers?
On SEC's webiste: The mission of the SEC is to protect investors maintain fair, orderly, and efficient markets and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public's trust.
You are supposed to protect the investors and this is very relavent to your discussion.
Best regards,
Jason S.