Moolenaar, Sen. Rick Scott Call on SEC to Restrict Capital Flows to Chinese Military Companies
Chairman John Moolenaar (R-MI) of the Select Committee on China and Senator Rick Scott (R-FL) sent a letter to Securities and Exchange Commission (SEC) Chairman Paul Atkins requesting the agency consider restricting listed Chinese companies' access to U.S. capital markets to protect America’s economy and national security.
In the letter, the lawmakers wrote:
"On June 8, 2026, the Department of War (DOW) released a revision to the statutorily required Section 1260H list of Chinese military companies operating directly or indirectly in the United States. DOW’s expansion of the 1260H list – adding 65 entities beyond last year’s list – represents the most robust assessment of the threat posed by these companies to the U.S. These companies have no business trading on U.S. exchanges, and we respectfully urge the Commission to consider what actions within its existing authority might appropriately address the ability of these companies to access U.S. capital markets and raise funds that may support the People’s Liberation Army’s (PLA) modernization efforts.
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The Securities and Exchange Commission (SEC) has broad oversight jurisdiction over American national exchanges by law and regulation. Section 23(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) authorizes the SEC to make such rules and regulations as necessary or appropriate to implement the Act. Section 6(b)(5) of the Exchange Act further provides that the rules of a national securities exchange must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest. Additionally, Section 12(k) authorizes the Commission to summarily suspend trading in any security for a period not to exceed 10 business days where it determines such action is in the public interest, and necessary for the protection of investors. Under the Holding Foreign Companies Accountable Act (as amended), the SEC can also suspend trading of securities of foreign companies that fail to meet the same regulatory and transparency standards required of U.S. companies."
In the letter, the lawmakers also recommended the SEC implement an alert system for investors with a ticker or flag to denote listed companies of concern, and to temporarily suspend the trading of securities of any company based in or owned by a foreign country of concern, if designated as such on a U.S. sanctions list.
Background
On June 8, 2026, the Department of War issued a significantly expanded list of Chinese military companies operating directly or indirectly in the U.S., as required by statute, adding 65 additional entities. Some companies identified on the Section 1260H list continue to access U.S. capital markets, allowing them to enrich themselves in America's economy.
In April 2025, Moolenaar and Scott held a joint hearing titled, “Financial Aggression: How the Chinese Communist Party Exploits American Retirees and Undermines National Security,” to expose the significant threats posed by China to American seniors and their retirement savings.