In my recent roundup of the top current stories in the world of D&O, I noted the increasing importance of geopolitical issues as a source of D&O claims risk. Among the factors supporting this trend is the rising relevance of cross-border enforcement initiatives, which in many instances had led to D&O claims. In the latest sign of the importance of cross-border enforcement issues, the SEC has announced the formation of a cross-border task force to “identify and combat cross-border fraud harming U.S. investors.” The SEC’s September 5, 2025, press release about the task force can be found here.  A September 10, 2025, post on TheCorporateCounsel.net blog about the new task force’s formation can be found here.

In its announcement, the SEC said that the task force will “focus initially on investigating potential U.S. federal securities laws violations.” The press release specifically cited “potential market manipulation, such as ‘pump-and-dump’ and ‘ramp-and-dump schemes.”

In an interesting additional note, the press release also noted that the task force will “focus enforcement efforts on gatekeepers, particularly auditors and underwriters, who help these companies access U.S. markets.”

Finally, the press release said that the task force will “examine potential securities law violations related to companies from foreign jurisdictions, such as China, where governmental control and other factors pose unique risks.”

The press release quotes SEC Chair Paul Atkins as saying that “we will not tolerate bad actors – whether companies, intermediaries, gatekeepers or exploitative traders – that attempt to use international borders to frustrate and avoid U.S. investor protections.”

According to a September 5, 2025, memo from the Quinn Emmanuel law firm (here), the new task force is “aimed squarely at rooting out fraud by foreign companies – and the professionals who help them operate in American markets.”

The law firm memo adds an interesting observation about the formation of the task force. As the memo puts it, “This isn’t just bureaucratic noise. It’s the first big enforcement signal from Chairman Paul Atkins since he took over in April. After months of staying tight-lipped on enforcement priorities, Atkins is now making it clear: old-school fraud is bac in the SEC’s sights, and the agency’s going global.”

The law firm memo also specifically called out the press release’s emphasis on China. The press release, the memo notes, indicates that we should expect particular attention on companies from China. While the SEC has scrutinized Chinese companies before, the memo notes, “this new task force signals a broader – and potentially more aggressive – approach.”

The law firm memo notes that in the past Atkins has promised to “take the SEC back to basics,” focusing on traditional market manipulation and fraud, rather than sweeping regulatory experiments. The new task force, the memo says represented “targeted, old-school enforcement with a modern cross-border twist.” The task force, the memo concludes “represents a clear shift toward targeted, fraud-focused enforcement – exactly what the new administration promised.”

And Speaking of New Task Forces: In other governmental enforcement initiatives under the Trump Administration, on August 29, 2025, the Departments of Justice and Homeland Security announced that they had launched a cross-agency Trade Fraud Task Force in order to “bring robust enforcement against importers and other parties who seek to defraud the United States,” and in particular to “aggressively pursue enforcement actions against any parties who seek to evade tariffs and other duties, as well as smugglers who seek to import prohibited goods into the U.S. economy.”  The agencies’ August 29, 2025, press release can be found here.

The press release announced the new task force notes that on Inauguration Day, President Trum issued the “America First Trade Policy.” A critical part of this policy, the press release notes, is “ensuring compliance with trade laws, including the payment of all applicable tariffs and duties.”

The new task force, the press release states, will “advance the America First Trade Policy by pursuing those who violate customs laws through duty and penalty collection actions under the Tariff Act of 1930, actions under the False Claims Act, and, wherever appropriate, parallel criminal prosecutions, penalties, and seizures.”

Interestingly, deep within the somewhat lengthy press release is a call for whistleblowers to help assist the task force’s efforts. The Task Force, the press release notes, “welcomes referrals and cooperation from the domestic industries that are most harmed by unfair trade practices and trade fraud.” This comment reflects that fact that often the best source for the government on tips regarding tariff evasion is from the alleged violators competitors (as well as from disgruntled former employees).

In prior posts (for example here), I have noted the potential D&O claims exposure arising from the Trump Administration’s active tariff policies. With respect to the press release’s reference to possible use of the False Claims Act, readers may want to refer to a recent post in which I specifically discussed the DOJ’s use of the False Claims Act in connection with enforcement relating to alleged tariff payment evasion.

In other words, even before the formation of the new task force, the administration had made it clear it intends to use its arsenal of tools to pursue tariff evaders. The new task force seems to further advance the administration’s efforts to enforce the tariff requirements – and to increase the likelihood of tariff-related D&O claims.

According to a September 5, 2025, memo from the Akin Gump about the new tariff enforcement task forces (here), the task force’s formation “underscores the mounting risk for importers as the DOJ intensifies its focus on trade fraud enforcement.” Companies, the memo says, “should anticipate heightened investigative and enforcement activity focused on ensuring compliance with international trade laws and regulations.”

Importers, the memo notes, “should carefully consider their risks in this area, including validating classifications, country of origin, valuations, record keeping requirements and procedures, as well as the accuracy of representations made to key counterparties, such as freight forwarders, insurers and financial institutions.”