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China Called Out in U.S. Warning Over Emerging Market Investing

  • SEC officials revisit tension with China over access to audits
  • Agency faults foreign jurisdictions over investor protections
Pan-Democracy Legislators And Activists Hold News Conferences As China Flexes Muscles, Prompting Outcry From U.S.
Photographer: Paul Yeung/Bloomberg

When it comes to companies exposed to emerging markets -- most notably China -- investors should beware the lack of visibility into their books, U.S. Securities and Exchange Commission Chairman Jay Clayton said Tuesday.

Foreign jurisdictions aren’t maintaining adequate standards of investor protection, and the U.S. has little control over that, Clayton and other officials said in a strongly worded statement. The group also underlined a longstanding point of conflict: that the main U.S. accounting watchdog can’t inspect the work that Chinese auditors do for companies that sell stock in American markets.