Monday, May 18, 2020

SENATOR DIANNE FEINSTEIN'S CHINESE PAYMASTERS SCREW INVESTORS OUT OF BILLIONS

Calls for Scrutiny of US-Listed Chinese Companies Will Benefit Investors


May 17, 2020 Updated: May 17, 2020
Commentary
When Chinese beverage brand Luckin Coffee admitted to fraud—wiping out $8.3 billion of value from U.S. investors’ pocketbooks—the scandal highlighted the risks of investing in Chinese companies.
In an interview with Fox Business Network last week, President Donald Trump said his administration is “looking at” Chinese companies such as Luckin that are listed on U.S. exchanges yet don’t always follow U.S. disclosure and accounting guidelines.
Investing bears risks. And investors understand that companies from emerging markets (such as China) bear an even higher risk–reward ratio, due to the less mature economy and less developed markets of their local countries.
But that’s not all with Chinese companies. There are additional risks that investors may not be aware of. While being listed on U.S. stock exchanges, Chinese companies such as Luckin aren’t held to the same accounting and disclosure standards as U.S. companies listed on those same exchanges.
There were 172 Chinese companies listed on U.S. exchanges that were valued at more than $1 trillion as of September last year, according to an annual report issued by the U.S.-China Economic and Security Review Commission.
They’re not on a level playing field with U.S. companies.
The U.S. stock market is home to companies from a multitude of industries, geographies, and financial positions. Investors’ ability to determine the fair price of a company’s stock is vital to the healthy functioning of the market. A level playing field and the integrity of market participants is paramount. That’s why the Trump administration’s investigations into Chinese companies should be a welcome development for investors.

Loopholes

As a starting point, Chinese companies should be bound by the same set of rules and guidelines as other companies listed on U.S. exchanges. But due to certain loopholes that U.S.-listed Chinese companies have exploited, they have more lax requirements compared to their American counterparts.
All U.S. companies are audited, and their auditors are professionally licensed accountants. The auditors’ work papers—the detailed records of their examination of their clients’ accounts—can be routinely examined by the U.S. accounting industry watchdog, the Public Company Accounting Oversight Board (PCAOB).
However, Chinese companies—even the U.S.-listed ones—are audited by Chinese accounting firms who don’t have to answer to the PCAOB or the U.S. Securities and Exchange Commission (SEC). The SEC has attempted since 2013 to strike a deal with Chinese regulatory authorities to obtain the work papers of Chinese companies, but has been unsuccessful so far. The Chinese Communist Party (CCP) leadership views the accounts and financial records of Chinese companies as “state secrets.”
Following the Enron and WorldCom accounting fraud scandals of the early 2000s, the United States enacted the Sarbanes-Oxley Act to provide additional oversight to publicly traded companies. Among other things, the chief executives and chief financial officers of publicly traded companies must annually attest to the internal controls of their companies, and must certify that they are unaware of fraudulent acts. In certain cases, they can be held criminally liable for fraudulent acts under their watch.
Chinese companies listed on U.S. exchanges aren’t subject to such oversight.
Additionally, Chinese companies listed in the United States are all considered “foreign private issuers.” Certain requirements must be met to be considered foreign private issuers (FPIs), but once certified, FPIs enjoy additional advantages compared to their U.S. counterparts.
All U.S.-listed companies must file quarterly financial statements reviewed by their auditors. But the SEC grants FPIs an exemption: the quarterly requirement is waived.
These rules were originally put in place to ease the regulatory and reporting burden of companies that predominantly list their shares on another exchange. For example, a German multinational company that lists its shares primarily on the Frankfurt Stock Exchange must abide by German regulatory standards, and the SEC didn’t want to overly burden a company that may have an additional listing in New York.
But no such burden exists for Chinese companies. Most Chinese companies traded in the United States are primarily listed in New York, and have no other regulatory reporting burden. So the FPI rules actually provide Chinese companies a loophole that allows significantly less transparency than their Western counterparts.
While most investors probably don’t pay too much attention to filed financial reports or CEO certifications, they play a major role in establishing trust, integrity, and honesty in operations of a company. The U.S. regulatory framework has checks and balances in place, which affords U.S. investors the luxury to not have to pay attention to such details.
It’s easy to forget that shareholders are owners, and as owners of these publicly traded companies, they must trust that their companies are functioning properly and executives are acting in good faith. Investors may have taken that for granted, given the long history of U.S. stock markets, but they can’t afford to be so blasé towards Chinese stocks.
Integrity and trust have defined the U.S. stock markets for a century. Regulators must ensure that they endure for the next century.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.


Senator Dianne Feinstein

  • Website
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    (415) 393-0707
  • DC Office
    (202) 224-3841
  • Los Angeles Office
    (310) 914-7300

FEINSTEIN HAS SPENT HER ENTIRE POLITICAL LIFE STALKING THE HALLS OF CONGRESS SNIFFING OUT DEALS THAT PUT MULTIPLE FORTUNES IN HER HUSBAND, RICHARD BLUM’S POCKETS EVEN AS SHE SOLD OUT AMERICA
The deal would impose no review of human rights and impose no conditions for democratic reforms, supervised multi-party elections and such. All that, and more, is already a done deal with China, like the USSR a one-party Communist dictatorship that never produced a single product the United States needs. This has come about, in large part, due to U.S. Senator Dianne Feinstein, San Francisco Democrat.
                                                                                      LLOYD BILLINGSLEY

After Feinstein was elected to the Senate in 1992, Blum continued profiting off their ties to China. A the same time, the freshman lawmaker was pitching herself as a “China hand” to colleagues, even once claiming “that in my last life maybe I was Chinese.” HARIS ALIC

FEINSTEIN HAS SPENT HER POLITICAL LIFE STALKING THE HALLS OF CONGRESS SNIFFING OUT DEALS THAT PUT HUNDREDS OF MILLIONS IN HER POCKETS.

SHE HAS AVOIDED PROSECUTION BY VOTING AGAINST ANY ETHICS BILLS AND HER HUSBAND, RICHARD BLUM'S HANDING OUT "CAMPAIGN CONTRIBUTION" BRIBES TO EVERY DEMOCRAT OUT THERE!




IN THE November 2006 election, the voters demanded congressional ethics reform. And so, the newly appointed chairman of the Senate Rules Committee, Dianne Feinstein, D-Calif., is now duly in charge of regulating the ethical behavior of her colleagues. But for many years, Feinstein has been beset by her own ethical conflict of interest, say congressional ethics experts.


“All in all, it was an incredible victory for the Chinese government. Feinstein has done more for Red China than other any serving U.S. politician. “ Trevor Loudon


“Our entire crony capitalist system, Democrat and Republican alike, has become a kleptocracy approaching par with third-world hell-holes.  This is the way a great country is raided by its elite.” ---- Karen McQuillan  AMERICAN THINKER.com


Senator Who Employed 


Chinese Spy Endorses 


Joe Biden for President

 

  

A high-profile U.S. senator with professional and personal ties to China — including once employing one of its spies — is backing former Vice President Joe Biden amid mounting questions over his son’s business dealings with the communist regime.

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