WASHINGTON, D.C. – Today, Chairman Rick Scott of the U.S. Senate Special Committee on Aging and Chairman John Moolenaar of the U.S. House Select Committee on the Chinese Communist Party (CCP) sent two letters: one to Paul Atkins, chairman of the U.S. Securities and Exchange Commission (SEC), and a second to Erica Williams, chairwoman of the Public Company Accounting Oversight Board (PCAOB), requesting a briefing on the United States’ audit oversight of firms linked to Communist China. The letters raise concerns that current agreements between the PCAOB and the China Securities Regulatory Commission may allow the CCP to interfere with critical financial information, potentially undermining the protections afforded to American investors under the Holding Foreign Companies Accountable Act (HFCAA). Chairmen Scott and Moolenaar are seeking clarity on whether the SEC and PCAOB are adequately enforcing HFCAA, particularly in light of continued CCP influence over Chinese companies listed on U.S. exchanges.
This follows an April 2025 joint hearing between the U.S. Senate Special Committee on Aging and the U.S. House Select Committee on the CCP to expose the significant threats posed by Communist China to American investments where Chairman Scott urged Americans to take immediate and decisive action to protect themselves from the risk of CCP-linked investments.
Read the letter to the SEC HERE and the letter to the PCAOB HERE.
Read the letter text below:
We write today to request a briefing with your office regarding access to information and auditing standards for companies under the jurisdiction of China and its ruling Chinese Communist Party (CCP).
Upon its enactment in 2020, the Holding Foreign Companies Accountable Act (HFCAA) impacted more than 200 Chinese companies listed on U.S. stock exchanges. The HFCAA requires the Public Company Accounting Oversight Board (PCAOB) to determine whether “the Board is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction ...” If the Board is unable to inspect or investigate completely, noncompliant companies must be delisted from our stock exchanges after two consecutive years. In August 2022, the PCAOB and Chinese regulators reached an agreement on information access within the People’s Republic of China for U.S.-listed companies. The agreement between Chinese securities regulators and the PCAOB allows the CCP government to withhold information from U.S. investors, which concerns us. The deal allows the CCP government to control access to CCP auditors and withhold certain categories of information. This arrangement gives us significant concern that American investors are not adequately protected.
When the PCAOB made the terms of this agreement public, Senator Scott immediately raised concerns in a letter to then-Securities and Exchange Commission (SEC) Chairman Gary Gensler. The PCAOB and SEC never addressed these concerns and, to this day, Chinese companies continue to benefit from access to American investor capital through U.S. stock exchanges. In April of 2025, the Senate Special Committee on Aging and the House Select Committee on the CCP held a joint hearing to examine the CCP’s exploitation of American retirees and its ongoing threat to our national security. In May 2025, we also sent you a letter highlighting the risks associated with China-based companies. In that letter, we highlighted how CCP-linked companies cannot operate independently from the state as a result of the 2017 National Intelligence Law, along with the 2020 requirement to participate in “United Front” work, requiring all firms to serve the CCP at all costs. That letter also highlighted that the CCP systemically concealed its control over Chinese firms from U.S. investors because Chinese law prohibits companies from making disclosures that “misrepresent or disparage” national policy, and the amended Counterespionage Law classifies information about military ties, state ownership, and party influence as national secrets.
Given this context, we request an urgent briefing from the SEC and the PCAOB to better understand the current agreement with Chinese securities regulators as well as its implications for U.S. investor protections. Thank you and we look forward to your prompt response. Should you have further questions, please contact the Select Committee staff at (202) 226-9678.
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