Florida U.S. Senator Marco Rubio was recently on CNBC warning American investors and public pension funds who invest in stocks of Peoples Republic of China businesses listed on U.S. stock exchanges to beware. Like Enron and Worldcom, the companies could potentially be fraudulent enterprises, or like they say in Texas, “big hat, no cattle” entities. Essentially, these Chinese “public” companies are not regulated by the Securities and Exchange Commission (SEC) like their American counterparts. And, these listed companies are not currently required to abide by U.S. or Western generally accepted accounting practices (GAAP) standards.

The SEC exists to protect U.S. investors from the shenanigans of public companies. Yet, trillions of dollars of U.S. capital from American investors and pension funds are invested and continue to flow into these highly risky non transparent companies that are not regulated by the SEC.

If there was ever a time for investors or buyers of stocks to beware, it would relate to investments in Chinese stocks. Even the large cap highly own stocks of Chinese companies such as Alibaba (BABA), Tencent (TCEHY), Nio (NIO) and Baidau (BIDU), pose major potential risks to U.S. investors since no independent accounting firm has audited their financial reports or filings to assess their veracity.

Just like the quarterly and annual numbers of gross domestic economic product provided by the Chinese Communist government are viewed as works of fiction by most Western economist, Chinese companies’ financials should be reviewed with similar, if not , more scrutiny and skepticism.

CNBC Mad Money host Jim Cramer has commented on many occasions to viewers that he personally avoids and would not recommend his viewers to invest in Chinese companies stocks. He cites their lack of financial transparency and unknown corporate governance as reasons to avoid all but the largest of these stocks.

Finally, Senator Marco Rubio and Hayman Capital Management founder Kyle Bass, have been sounding the alarm for years about the threat potentially posed to the U.S. financial markets and to the retirement pension plans of millions of Americans by these listed foreign companies. Senator Rubio, along with a bi-partisan group of Senators, have been both sounding the alarm and proposing that all companies listed on major U.S. security exchanges be required to follow the same reporting standards and independent audit requirements followed by U.S. public companies. And, those foreign companies found not in compliance with SEC regulations for public companies should be de-listed from American security exchanges.