July 7, 2020
What sort of proactive (rather than reactive) stance will the SEC take on emerging markets, particularly Chinese companies listed on U.S. exchanges? Particularly to proactively prevent fraud?
The recent LK fraud may only be the tip of the iceberg. There is overwhelming evidence that GSX is committing multi-billion dollar fraud. This evidence spans multiple reports from reputable outfits to groups of Chinese investors and tech experts. These reports reveal fabrication of revenues, user/class size data, among many others. I don't think I've ever seen such overwhelming evidence of fraud on a NYSE-listed stock (typically you only see such things on OTC/pink sheet listings) before, and to have the evidence so glaring. Yet, to date, no action appears to have been taken, either from the SEC or auditors. There also doesn't appear to be any action to prevent such fraud in the future.