SEC Launches Cross-Border Task Force to Tackle Fraud

The Securities and Exchange Commission has established a new international task force aimed at tackling cross-border fraud, including pump-and-dump schemes.

The United States Securities and Exchange Commission aims to extend its efforts against fraud to foreign entities with a newly formed cross-border task force, as noted in a recent press release.

The SEC’s Cross-Border Task Force, announced on Friday, will primarily focus on probing potential infringements of U.S. federal securities laws by overseas firms. Key areas of investigation will include market manipulation, specifically citing issues like “pump-and-dump” schemes.

Regulators, including the U.S. Commodity Futures Trading Commission, have consistently warned investors and market players, particularly in the cryptocurrency sector, to remain vigilant against possible pump-and-dump schemes.

Pump-and-dump schemes in crypto

In the crypto space, pump-and-dump scams typically involve lightly traded altcoins and meme tokens, often orchestrated by insiders or bad actors who artificially inflate prices, heavily market the projects or tokens, and subsequently sell off holdings to unsuspecting buyers.

Retail investors are often the primary victims of these misleading actions that lead to market collapses.

While investors are encouraged to perform thorough research and stay alert for exaggerated claims, the SEC emphasizes that its task force will pursue entities and individuals whose fraudulent conduct harms U.S. investors.

In addition to targeting pump-and-dump schemes, the task force will also scrutinize gatekeepers, including auditors and underwriters, who facilitate access to U.S. capital markets for malicious actors.

“We welcome companies worldwide that seek to access U.S. capital markets,” said SEC chair Paul Atkins. “However, we will not tolerate bad actors—be they companies, intermediaries, gatekeepers, or exploitative traders—that use international borders to evade U.S. investor protections. This new task force will consolidate our investigative resources, enabling the SEC to deploy every available tool to combat transnational fraud.”

Atkins added that staff from across the agency will work together to bolster this initiative, and the Commission is open to suggestions for additional actions that could enhance protections for U.S. investors. The SEC chair mentioned that the regulator would consider measures such as new disclosure guidance and necessary rule revisions.