The company has been investigated by the securities and Exchange Commission, which asked the company to provide financial records since January 2018, a statement said on Thursday. After the announcement, as of press release, iqiyi shares fell more than 12% after hours. < / P > < p > the SEC said the investigation was related to the short report of Wolfpack on iqiyi. On April 7 this year, us short agencies Wolfpack research and muddy water released a short report against iqiyi, a star China stock company. They listed three major financial frauds that exaggerated the company’s revenue. It is estimated that iqiyi’s revenue in 2019 will be overstated by about 27% – 44%. On the day of the short selling report, iqiyi’s share price was short-term%, but iqiyi quickly responded and firmly denied the false accusation, and the stock price rose immediately. The preciseness and comprehensiveness of the report have also been widely questioned by people from all walks of life. They believe that there are major defects in the report, such as insufficient sample size and improper evidence collection method, which is in sharp contrast to the previous richin short report. < p > < p > prior to this, Carson, the founder of muddy water, a well-known short seller Block) said that they think iqiyi’s behavior belongs to the “gray zone” of misreporting 20% to 50% of its income, which is not as serious as that of another Chinese education company. Most of the time, market participants will think that this level of misrepresentation is acceptable, as the share price may remain firm, resulting in short selling failure. This is not the first time this year that U.S. regulators have launched a disaster on China capital stock companies. First of all, Ruixing disclosed its financial fraud and triggered controversy. Then, the SEC, PCAOB and NASDAQ Exchange of the United States and other parties have expressed their opinions that they will raise the listing and review requirements for emerging market companies including China. Recently, the US government has directly attacked tiktok and Tencent to prohibit any person or enterprise subject to the jurisdiction of the United States and Tencent Byte jump or Tencent for any transaction. < / P > < p > a few days ago, education institutions repeatedly short with who Xue (trading code: GSX) was once again shorted by citron on August 7, and the stock price fell by 18.5% in a single day. Prior to that, the stock price of who learned from broke through 130 U.S. dollars, and the P / E ratio was even close to Tesla. Even after the stock price fell from its high level, the market value of learning from others was $23.8 billion as of August 13, still exceeding the market value of New Oriental of $22.3 billion. The regulatory environment is also an important factor in institutional short making. Bullock said that muddy water tried to sell Alipay Wirecard in 2016, but soon discovered that German regulators obviously protected the company, so muddy water soon gave up the empty position. The giant’s share price plummeted by more than 70% until June this year when the scandal of accounting fraud was exposed. However, Bullock stressed that the regulatory environment in the United States was the opposite of that in Germany at that time, and it was easier to short these companies.