The Securities and Exchange Commission (SEC) is increasing its efforts to target companies involved in ‘pump-and-dump’ schemes. A strategic shift in SEC enforcementThe latest enforcement by the SEC focuses on a concerning pattern where emerging IPOs of Chinese shell companies are listed on U.S. exchanges through questionable underwriters. The agency is investigating dozens of these IPOs, many of which were run by U.S.-based law firms, accounting firms, and investment banks. The SEC is focusing on firms that list on Nasdaq and the New York Stock Exchange in particular, where several Chinese companies are showing suspicious trading behavior. The SEC warns investors to be cautious of low-volume IPOs and companies with limited active history.