Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, sent a letter to Securities and Exchange Commission (SEC) Chairman Paul Atkins seeking information about the agency’s efforts to prevent foreign stock manipulation schemes that have cost American investors billions of dollars.

In the letter, Ranking Member Waters raises concerns about so-called “ramp-and-dump” schemes, in which foreign-based fraudsters use social media and online investment groups to encourage Americans to buy certain stocks while secretly planning to sell their own shares after prices rise. Once the stock price collapses, investors are left with steep losses. According to public reporting cited in the letter, these scams have erased at least $16 billion in market value since 2023, with many involving SEC-registered companies listed on U.S. exchanges.

“I view the funneling of billions of dollars in Americans’ retirement savings to criminal enterprises overseas to be a massive problem. I appreciate that the SEC has begun paying close attention to these matters. Neither Congress nor the SEC should allow microcap issuers that bare the identifiable markers of being potentially-fraudulent—including foreign status, small market capitalization, limited public float, and common underwriters—to register with the SEC as securities,” Waters continued “…However, the fact remains that this is a significant and growing problem, and that enforcement ‘after the fact’ is insufficient. More must be done by the SEC to prevent this fraud before it occurs.”

Ranking Member Waters notes that witnesses before the Committee recently testified that regulators have tools to identify warning signs of these schemes before investors are harmed, but that current responses are often focused on investigating fraud after investors have lost their money. To better understand the SEC’s efforts, Ranking Member Waters is requesting information about how the agency reviews certain companies before their stocks are registered, what steps it is taking to identify and stop these schemes, how it is working with stock exchanges and other regulators, and whether additional tools or authorities are needed to better protect investors.

In closing, the letter also asks whether the SEC is considering additional safeguards to help identify higher-risk issuers, respond more quickly when suspicious activity is detected, and strengthen efforts to prevent these schemes before they reach American investors.

Ranking Member Waters requested that Chairman Atkins respond to the Committee’s questions by July 22, 2026.

See the letter HERE.

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