U.S. regulators are taking new action regarding the numerous Chinese stock "pig-butchering" scams that emerged last year. On Monday, the U.S. House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party announced it is investigating three New York-based IPO underwriters for their significant roles in bringing Chinese companies suspected of involvement in these scams to the market. Notably, two of the underwriters under investigation have connections to the Trump family.
The committee's Ranking Member, Representative Ro Khanna (D-CA), and Chairman, Representative John Moolenaar (R-MI), sent letters to three U.S. underwriters—D. Boral Capital, Dominari Securities, and Revere Securities—requesting information about their underwriting of initial public offerings for Chinese stocks. These IPOs allegedly culminated in "pig-butchering" schemes using "pump-and-dump" tactics to defraud American investors and siphon off substantial sums of money.
The lawmakers wrote, "Multiple state-run organized criminal networks have launched systematic attacks on American investors. These fraud networks exploit Chinese shell companies listed in the U.S. through coordinated pump-and-dump stock manipulation schemes to scam American families, and your firms appear to be involved." Estimates suggest that since 2023, approximately $16 billion in U.S. wealth has been stolen via these manipulation schemes, with signs of manipulation present in 25% of small-cap Chinese stocks, highlighting the staggering scale of the fraud. FBI records indicate a 300% increase in complaints related to these Chinese stock "pig-butchering" scams.
The committee has demanded a wide range of documents from the three underwriters, including communication records, sources of funds, trading records, and due diligence policies. The committee indicated to media that these underwriters—whether through willful ignorance or inadequate controls—allowed external capital to manipulate small-cap Chinese stocks. The IPOs for these Chinese companies involved entities with Variable Interest Entity structures, which "do not provide U.S. investors with actual ownership of the related Chinese businesses." The letters also highlighted the "proxy account" model, which allows individuals within China to open securities accounts on a large scale. These accounts are funded by undisclosed third parties and are "controlled by hidden Chinese principals."
Chinese stock "pig-butchering" scams prompted stringent regulatory responses. Between July and August of last year, rumors about these scams involving small-cap Chinese stocks circulated widely on Wall Street. The Financial Times specifically named seven companies, including Concorde International (CIGL), Ostin Technology Group Co. (OST), Top KingWin Ltd (TCJH), Skyline Builders LLC (SKBL), Everbright Digital Co. (EDHL), Park Ha Biological Technology Ltd (PHH), and Pheton Holdings Ltd (PTHL). These seven stocks largely shared common characteristics: small market capitalizations, typically ranging from a few million to tens of millions of dollars; previously low stock prices; violent price surges of over tenfold within two to three months before July, attracting numerous retail investors; and sudden single-day crashes of 70-90% after the price spikes, followed by sustained declines, leaving retail investors with little chance to exit.
In response to this market threat, U.S. regulators acted swiftly. In June last year, Nasdaq enhanced scrutiny of small IPOs originating from mainland China and Hong Kong to prevent extreme post-listing price volatility. On September 3, Nasdaq proposed amendments to its listing standards, including raising the minimum market value of publicly held shares for new listings under the net income standard to $15 million (from the current $5 million threshold), accelerating the suspension and delisting processes for companies with market caps below $5 million and listing deficiencies, and imposing a minimum public offering proceeds requirement of $25 million for new listings primarily operating in China. Nasdaq stated these measures specifically target "emerging patterns related to potential pump-and-dump schemes within the U.S. cross-market trading environment."
On September 5 last year, the U.S. Securities and Exchange Commission announced the formation of a new specialized working group to investigate market manipulation like "pump-and-dump" schemes associated with foreign companies, with a focus on potential securities law violations involving Chinese companies. Subsequently, over a dozen companies suspected of involvement in such scams have been suspended or penalized.
A notable aspect of the House committee's investigation is that two of the three underwriters are linked to the Trump family. D. Boral Capital is a small investment bank that has served as lead underwriter or bookrunner for several Special Purpose Acquisition Companies. In 2025, D. Boral Capital was designated as the underwriter for New America Acquisition I Corp., a SPAC seeking a $300 million IPO, backed by Eric Trump and Donald Trump Jr., among others, and focused on U.S. manufacturing. Furthermore, D. Boral Capital's website publicizes its involvement in the merger between Trump Media & Technology Group and Digital World Acquisition Corp.
Dominari Securities is an investment company whose parent, Dominari Holdings, has close ties to Donald Trump Jr. and Eric Trump. The company positions itself as the preferred dealmaker for Trump family-related investment projects, including in artificial intelligence and data centers. The Trump brothers joined Dominari Securities' advisory board in 2025, each holding approximately a 6% stake, a collaboration that drove the company's stock price up over 80% in early 2025. The company, formerly known as Iikido Pharma, is headquartered in Trump Tower.
Revere Securities is the only one of the three underwriters not linked to the Trump family. It is a subsidiary of Revere Capital Advisors. Founded in 1983, Revere Securities primarily engages in financial services, including broker-dealer and investment banking activities, and acted as a placement agent in last year's U.S. IPO of the Chinese company YMT.
At the time of reporting, the three underwriters under investigation had not responded to requests for comment.
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