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June 4, 2020, 3:26 p.m. EDT

Pompeo to call on stock exchanges to step up oversight of Chinese companies

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By Chris Matthews

Secretary of State Mike Pompeo will warn American investors of "fraudulent" accounting practices at Chinese companies and urge stock exchanges to tighten rules on them during a speech later Thursday, according to Reuters. The remarks will come as Congress is considering legislation that would bar Chinese companies from raising money in the U.S., unless they submit to American accounting procedures. A bill doing so has passed the Senate and has been introduced in the House. Pompeo will point to moves by Nasdaq to increase restrictions on initial public offerings after accusations of fraud against Luckin Coffee Inc. sent U.S.-traded shares of the Chinese coffee chain down 90% year-to-date. Securities and Exchange Commission Chairman Jay Clayton warned investors in April that investors "should consider the risks" related to U.S. regulators' inability to oversee audits of publicly listed Chinese companies.

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