"Pig Butchering" scams targeting Chinese concept stocks! Three Wall Street IPO underwriters are under investigation, two of which are connected to Trump

Source: U.S. Stock Finance Society

In response to the numerous “pig butchering” scams involving Chinese concept stocks last year, U.S. regulators have taken new actions!

On Monday, the official website of the “Special Committee on China Issues” under the U.S. House of Representatives announced that it is investigating three IPO underwriters based in New York for their significant roles in bringing Chinese concept stocks suspected of participating in “pig butchering” scams to the market.

Notably, two of the underwriters under investigation are connected to the Trump family.

Manipulating Stock Prices Using Shell Companies

The committee’s lead member, Ro Kanar (Democrat from California), and Chair John Mulanar (Republican from Michigan), sent letters to three U.S. underwriters—D. Boral Capital, Dominari Securities, and Revere Securities—demanding information about their underwriting of Chinese concept stock IPOs. Reports indicate these IPOs were ultimately used in “pump and dump” schemes to deceive American investors and siphon off large sums of money.

In the letters, they stated: “Multiple organized crime networks operating nationally have launched systematic attacks on American investors. These scam networks utilize Chinese shell companies listed in the U.S., coordinating ‘pump and dump’ stock manipulation schemes to defraud American families, and your companies appear to be involved.”

It is estimated that since 2023, $16 billion of American wealth has been stolen through these stock manipulation schemes, with 25% of small-cap Chinese concept stocks showing signs of manipulation. The scale of fraud is shocking. FBI records show a 300% increase in complaints related to these Chinese stock “pig butchering” scams.

The committee requested these three underwriters provide extensive documentation, including communication records, sources of funds, transaction histories, and due diligence policies.

The committee pointed out to the media that these underwriters—whether knowingly or due to lax oversight—allowed external funds to manipulate small Chinese concept stocks. These IPOs involve companies with variable interest entity (VIE) structures, which “do not provide U.S. investors with actual ownership of the Chinese companies.”

The letters also highlighted the “agent account” model, which allows individuals within China to open large numbers of securities accounts funded by undisclosed third parties and “controlled by hidden Chinese entities.”

Stringent Regulations on Chinese Concept Stock “Pig Butchering”

Last July and August, the “pig butchering” scams involving small Chinese concept stocks caused a stir on Wall Street. The Financial Times directly named seven companies, including: Concorde International (CIGL), Ostin Technology (OST), Top KingWin (TCJH), Skyline Builders (SKBL), Everbright Digital (EDHL), Park Ha Biological Technology (PHH), and Pheton Holdings (PTHL).

These seven “pig butchering” Chinese stocks share similar characteristics:

1. Small market caps, ranging from a few million to tens of millions of dollars;
2. Previously low stock prices;
3. Before July, most experienced violent surges of over tenfold within 2-3 months, attracting many retail investors following the trend;
4. After the surge, they suddenly plummeted 70-90% in a single day, then continued to decline, returning to pre-surge levels, leaving retail investors unable to react or escape.

In response to this market-threatening phenomenon, U.S. regulators moved quickly.

In June last year, Nasdaq tightened scrutiny of small IPOs from mainland China and Hong Kong to prevent large price swings after trading begins.

On September 3, Nasdaq announced plans to amend its listing standards: for companies listing based on net income, the minimum public float market value will increase from $5 million to $15 million; for companies with market value below $5 million and listing deficiencies, the suspension and delisting process will be accelerated; for newly listed companies primarily operating in China, the minimum fundraising requirement will be $25 million.

Nasdaq also stated that these measures “specifically target emerging patterns related to potential stock price manipulation in the U.S. cross-market trading environment.”

On September 5, the U.S. Securities and Exchange Commission (SEC) announced the formation of a new special task force to investigate market manipulation related to foreign companies, including “pump and dump” schemes, with a focus on potential securities law violations involving Chinese firms. Subsequently, more than a dozen companies suspected of participating in such scams have been suspended or penalized.

Two of the Underwriters Connected to the Trump Family

Interestingly, two of the three underwriters under investigation by the House are linked to the Trump family.

D. Boral Capital is a small investment bank that has served as lead underwriter or bookrunner for several SPACs (Special Purpose Acquisition Companies).

In 2025, D. Boral Capital was designated as the underwriter for New America Acquisition I Corp., a SPAC seeking to raise $300 million in an IPO, supported by Eric Trump and Donald Trump Jr., focusing on U.S. manufacturing.

Additionally, D. Boral Capital announced on its website its involvement in the merger between Trump Media & Technology Group and Digital World Acquisition Corp.

Dominari Securities is an investment firm whose parent company, Dominari Holdings, has close ties to Donald Trump Jr. and Eric Trump. The firm positions itself as a preferred dealmaker for Trump family-related investments, including in AI and data centers.

The Trump brothers joined Dominari Securities’ advisory board in 2025, each holding about 6% of the shares. This partnership caused the company’s stock to surge over 80% in early 2025. The firm’s predecessor was Iikido Pharma, headquartered in Trump Tower.

Revere Securities is the only one of the three underwriters with no connection to the Trump family; it is a subsidiary of Revere Capital Advisors. Founded in 1983, Revere Securities provides financial services, including brokerage and investment banking, and served as a placement agent in last year’s YMT Chinese concept stock IPO.

As of press time, these three underwriters under investigation have not responded to requests for comment.