Baton Rouge, LA — Louisiana State Treasurer John Fleming, M.D., joined 23 of his colleagues from the State Financial Officers Foundation (SFOF) to implore the U.S. Securities and Exchange Commission (SEC) to prevent American investment dollars from flowing into companies tied to the Chinese Communist Party (CCP).
In a joint letter to SEC Chairman Paul Atkins, the coalition of state treasurers and financial officers urged the agency to reform its rules governing the Foreign Private Issuer (FPI) designation. They warned that the current framework allows Chinese companies, often incorporated in places like the Cayman Islands, to obscure their ties, to benefit from looser regulatory standards while exposing U.S.. investors to fraud and national security risks.
Treasurer Fleming said, “The SEC must take decisive action to ensure that U.S. capital is protected and that our markets remain strong, safe, and free from foreign exploitation.”
The letter emphasized three main points:
· Protecting U.S. investors from CCP-linked companies that may conceal risks through opaque financial structures.
· Preventing adversaries from benefiting from relaxed FPI disclosure rules while advancing China’s “military-civil fusion” strategy.
· Requiring transparency by mandating disclosures of material risks for issuers from adversarial nations.
O.J. Oleka, CEO of SFOF, stated, “It makes no sense to grant relaxed status to issuers based in countries that are our adversaries, like China. This is about protecting taxpayers and investors from unnecessary risks.”
The coalition’s effort builds on growing momentum at both the state and federal levels to restrict CCP-linked companies from U.S. capital markets. Earlier this year, lawmakers and financial officers also called on the SEC to consider delisting noncompliant Chinese firms that fail to meet American disclosure and auditing standards.
“By taking this action, the SEC will be prioritizing the safety of American investors and our national security interests, while recognizing the dangerous threat posed by the CCP,” said Treasurer Fleming.
