US lawmakers have opened a new investigation into Wall Street firms that helped bring small Chinese companies to US markets, widening scrutiny of a sector that regulators and investors have increasingly linked to manipulation and steep retail losses. At the center of the latest inquiry is Dominari Securities, a New York brokerage tied to the Trump family through advisory roles held by Eric Trump and Donald Trump Jr. The probe adds a political dimension to a broader market-integrity issue that has already erased billions in investor value.
Congressional probe targets underwriters
The House Select Committee on the Chinese Communist Party, led by Chair John Moolenaar, a Michigan Republican, and ranking member Ro Khanna, a California Democrat, sent letters on March 9, 2026, to three brokerage and underwriting firms: D. Boral Capital, Dominari Securities, and Revere Securities. The committee is seeking records tied to Chinese initial public offerings, including due diligence files, know-your-customer procedures, communications, and trading-related information dating back to 2020.
According to Bloomberg Law, the committee alleges that some underwriters may have knowingly, or through weak controls, enabled “ramp-and-dump” schemes involving Chinese shell companies listed on US exchanges. Lawmakers say these structures often leave American investors with no direct ownership in the underlying Chinese operating businesses, especially when variable interest entity structures are used.
The letters also focus on what the committee describes as a “nominee account” system, in which brokerage accounts are allegedly opened in large numbers and funded by undisclosed third parties while being controlled by hidden principals in China. That issue goes beyond a single IPO and points to a wider concern about whether US market gatekeepers are adequately screening foreign listings and related trading activity.
US lawmakers probe Trump family-linked firm over Chinese stock scams
Dominari Securities has drawn outsized attention because of its links to the Trump family. The firm operates from Trump Tower, and its parent, Dominari Holdings, has been associated with Eric Trump, who joined the company’s advisory board in February 2025 alongside Donald Trump Jr., according to public filings cited in coverage of the probe.
That connection does not itself establish wrongdoing. Still, it raises the political stakes of the investigation at a time when lawmakers in both parties are increasingly examining whether firms with high-profile political ties receive special scrutiny, or special protection, in sensitive financial matters. The committee’s inquiry appears focused on Dominari’s underwriting and compliance practices rather than on the Trump family personally.
Dominari had already surfaced in earlier congressional scrutiny. In a 2025 letter, Representative Sean Casten and Senator Jeff Merkley asked the Securities and Exchange Commission to review Dominari’s role in a reverse-merger transaction involving Justin Sun’s Tron-related business, noting that Eric Trump and Donald Trump Jr. were listed on Dominari’s advisory board. That earlier letter centered on possible conflicts of interest and investor-protection concerns, though it addressed a separate transaction from the current IPO probe.
Billions in losses sharpen the stakes
The financial damage cited by lawmakers is substantial. Bloomberg Law reported that the committee referenced an estimate that roughly $16 billion in market capitalization has been wiped out since 2023 in apparent stock-manipulation schemes tied to Chinese listings. Cointelegraph, citing the same congressional letters, reported that lawmakers said about $16 billion in US investor wealth had been drained over that period.
The SEC has also stepped up enforcement pressure. Bloomberg Law reported that more than a dozen trading suspensions have hit foreign companies linked to these schemes since SEC Chair Paul Atkins announced a cross-border task force in September 2025. That suggests the House inquiry is unfolding alongside a more aggressive regulatory posture rather than in isolation.
For retail investors, the pattern is familiar and damaging:
- A little-known company lists shares in the US.
- Trading activity rapidly pushes the stock price higher.
- Promotional activity and coordinated buying create momentum.
- Insiders or early holders sell into the surge.
- The stock collapses, leaving later investors with heavy losses.
Lawmakers argue that underwriters and brokers play a critical gatekeeping role at the front end of that cycle. If due diligence is weak, or if suspicious account activity is missed, manipulated listings can gain a veneer of legitimacy before the damage becomes clear.
Why underwriters are under pressure
Underwriters occupy a critical position in any IPO. They help vet issuers, market the offering, and connect companies to investors. In cross-border deals, that role becomes even more important because US investors often have limited visibility into foreign corporate structures, auditors, and beneficial ownership.
The House committee is now testing whether those safeguards were strong enough. Its letters seek detailed information on due diligence, customer verification, and off-channel communications, signaling concern that compliance failures may have extended beyond ordinary underwriting risk.
This matters because Chinese small-cap listings have been a recurring source of controversy in US markets for years. Congress previously responded to broader concerns over audit access by passing the Holding Foreign Companies Accountable Act in 2020, a law designed to force greater transparency for foreign issuers whose auditors could not be fully inspected by US regulators. The current probe shows that even after those reforms, lawmakers still see vulnerabilities in how some foreign companies reach American investors.
Political and market implications
The investigation lands at a sensitive moment for Trump-linked business interests. In recent months, Democratic lawmakers have also pressed regulators over Trump family ties to crypto ventures and other financial deals involving foreign-linked counterparties. Those inquiries are distinct from the Chinese IPO issue, but together they show a growing willingness in Washington to examine whether politically connected firms create added conflict-of-interest or national-security concerns.
For Republicans and Democrats alike, the China angle is politically potent. The House Select Committee on China has framed the alleged schemes as part of a broader threat to US investors and market integrity. By making the probe bipartisan, lawmakers may be trying to show that the issue is not simply partisan oversight but part of a wider campaign to tighten scrutiny of Chinese-linked financial activity in US markets.
For Wall Street, the message is clear: firms involved in small foreign listings may face tougher questions about who they bring to market, how they verify counterparties, and whether they can detect suspicious trading patterns before retail investors are harmed. Even absent formal charges, congressional scrutiny alone can reshape compliance practices and reputational risk calculations.
What comes next
The immediate next step is document production. The committee has asked the firms to turn over records related to Chinese IPO activity, and those materials could shape whether lawmakers hold hearings, refer matters to regulators, or push for new legislation.
Possible outcomes include:
- Expanded oversight hearings focused on underwriters, brokers, and exchange controls.
- Regulatory referrals to the SEC or FINRA if lawmakers identify potential compliance failures.
- New disclosure rules for foreign issuers, beneficial ownership, or nominee-account activity.
- Higher underwriting standards for small-cap foreign listings, especially those using opaque structures.
No public finding of wrongdoing has been announced against Dominari Securities, D. Boral Capital, or Revere Securities as part of this probe. The firms’ responses, and any subsequent action by Congress or regulators, will determine whether the inquiry remains a political flashpoint or becomes a catalyst for broader market reform.
Conclusion
The latest case in which US lawmakers probe Trump family-linked firm over Chinese stock scams combines two powerful Washington themes: concern over Chinese-linked financial activity and heightened scrutiny of businesses connected to prominent political figures. At its core, however, the issue is about investor protection. Lawmakers are asking whether Wall Street gatekeepers did enough to prevent questionable Chinese listings from reaching US markets and harming retail investors. With billions in losses cited and bipartisan attention now focused on the underwriting pipeline, the outcome could influence both financial regulation and the political debate around Trump-linked business interests for months to come.
Frequently Asked Questions
What is the current investigation about?
The House Select Committee on the Chinese Communist Party is investigating whether several US underwriters helped bring Chinese companies to market that were later tied to alleged stock-manipulation schemes.
Which firms are named in the probe?
The letters were sent to D. Boral Capital, Dominari Securities, and Revere Securities.
Why is Dominari Securities getting special attention?
Dominari is tied to the Trump family through advisory roles held by Eric Trump and Donald Trump Jr., making the inquiry politically significant as well as financially important.
How much investor money is at issue?
Lawmakers cited estimates that about $16 billion in market value or investor wealth has been lost since 2023 in apparent schemes tied to these types of Chinese listings.
Have any of the firms been found guilty of wrongdoing?
No public finding of wrongdoing has been announced in connection with this congressional probe. At this stage, lawmakers are seeking documents and information.
What could happen next?
Congress could hold hearings, refer issues to regulators, or pursue tighter rules for foreign listings and underwriting practices if the evidence supports further action.
