Initial public offerings from small foreign companies have nearly disappeared from US markets as regulators and exchanges intensify their efforts to stop pump and dump schemes targeting retail investors.

Only 13 microcap companies have listed on Nasdaq and the New York Stock Exchange so far in 2026, compared with almost 80 by the middle of 2025. The group raised less than $300 million combined, with all but one offering bringing in less than $25 million.

The slowdown follows a record 2025, when nearly 140 microcap IPOs raised $1.6 billion. Many of those stocks surged shortly after listing before suffering sharp collapses, while the Securities and Exchange Commission suspended trading in several companies over concerns about social media driven manipulation.

The SEC, the Financial Industry Regulatory Authority and Nasdaq have each taken steps to address the issue.

The SEC formed a cross border task force focused on overseas market manipulation and later established another enforcement group targeting retail fraud. The agency also suspended trading in more than a dozen foreign stocks, citing possible manipulation involving social media promotions in nearly every case.

Nasdaq introduced new rules in December that give the exchange more discretion to reject listings when companies, auditors, underwriters or legal advisers raise concerns.

The exchange also introduced tougher requirements for companies based in China and Hong Kong, including higher minimum fundraising thresholds. A Nasdaq analysis found that 143 of 151 China based companies listed between August 2022 and April 2025 would not have qualified under the stricter rules.

Regulators have repeatedly warned that some overseas microcap companies can become targets for organized pump and dump campaigns.

These schemes typically involve promoters purchasing shares before encouraging retail investors to buy through online forums, chatrooms and social media. The promoters then sell their positions after the price rises, causing the stock to collapse.

Only two Asia based microcap companies have listed on major US exchanges during the first half of 2026. Both have declined by more than 50% since their debuts, although regulators have not accused either company of wrongdoing.

The increased scrutiny has also created a growing backlog. More than a dozen US based microcaps and nearly 40 companies based in Asia have filed to go public since the beginning of 2025 but have not completed their listings.

Some market participants are concerned the rules could go too far and prevent legitimate small companies from accessing public capital.

A proposal currently under SEC review would allow Nasdaq to delist companies whose market value remains below $5 million for 30 days. The Small Public Company Coalition warned that the measure could make it harder for smaller issuers to secure financing and recover from temporary declines.

SEC enforcement director David Woodcock said regulators must weigh capital formation against the potential losses caused by fraudulent listings.