Safeguarding Main Street: Combatting Fraud and Exploitation in Our Capital Markets

The GOP Financial Services Subcommittee on Capital Markets held a hearing on April 16, 2026, titled "Safeguarding Main Street: Combatting Fraud and Exploitation in Our Capital Markets." The hearing focused extensively on the rising threat of financial fraud, including investment scams, pump and dump schemes, account takeovers, and the exploitation of seniors and vulnerable populations. Witnesses from FINRA, AARP, private capital markets, and academia testified on the challenges posed by emerging technologies such as artificial intelligence and social media platforms in facilitating fraud. Discussions emphasized the need for enhanced regulatory tools, including proposed FINRA rules allowing temporary holds on suspicious transactions, improved interagency and international cooperation, and stronger enforcement capacity at the SEC, which has seen staffing and enforcement reductions. Legislative proposals like the Financial Exploitation Prevention Act and the TRAPS Act were highlighted as critical to empowering financial institutions to intervene earlier and share intelligence more effectively. The hearing also addressed concerns about insider trading, tokenized securities, and the role of social media companies in enabling scams. Overall, the committee underscored the urgency of coordinated federal action, increased funding for enforcement agencies, and leveraging technology to protect investors and maintain trust in U.S. capital markets.