A congressional investigation has found that major U.S. banks, including JPMorgan Chase, Bank of America, and Morgan Stanley, helped Contemporary Amperex Technology Co. Limited (CATL), a Chinese battery company designated by the Pentagon as a 'Chinese military company,' raise billions of dollars from global investors through stock offerings, despite unresolved national security concerns [1]. According to a report from the House Select Committee on the Chinese Communist Party, JPMorgan Chase and Bank of America underwrote CATL’s Hong Kong IPO after the Pentagon placed CATL on its Section 1260H list in January 2025, which identifies firms linked to China’s military or military-civil fusion strategy [1]. The report further states that JPMorgan, Bank of America, and Morgan Stanley participated in a subsequent CATL offering [1].
The committee’s findings highlight a significant policy gap: while the Pentagon’s designation carries reputational consequences, it does not prohibit U.S. investment or commercial activity with listed companies under current law [1]. The report asserts, 'To be clear, the banks broke no U.S. law and the transactions were not prohibited by U.S. law,' but criticizes the banks for choosing to 'essentially disregard the U.S. government’s Chinese military company designation to make millions of dollars' [1]. The banks reportedly relied on CATL’s assurances that it had no military ties, despite the Pentagon’s conclusions and what the committee described as incomplete responses during due diligence [1].
The committee cited evidence of CATL’s relationships with companies on U.S. restriction lists and research collaborations with defense-linked institutions, as well as identical responses from CATL to multiple JPMorgan questions about ties to the People’s Liberation Army and dual-use technologies [1]. Select Committee Chairman John Moolenaar called for 'serious policy changes to ensure what JPMorgan and Bank of America did never happens again,' emphasizing the need for stricter controls on American banks’ involvement with Chinese military-linked firms [1].
The report places Wall Street at the center of a growing debate in Washington over whether U.S. financial institutions should continue facilitating capital raising for companies identified as linked to China’s military, even when such activities remain legal [1]. No immediate market reaction or analyst opinions were provided in the article [1].
CONCLUSION
The congressional report has intensified scrutiny on U.S. banks’ roles in raising capital for Chinese military-linked firms, exposing a significant gap in current U.S. policy. While the banks did not violate any laws, the findings may prompt calls for stricter regulations and policy changes affecting future financial dealings with entities on the Pentagon’s Section 1260H list.