Big government fired a shot across Chinese e-commerce giant Alibaba's (BABA) - Get Report  bow this week, sending a clear warning: Follow our rules, or else. The company's stock is suffering as a result.

Yesterday, Alibaba disclosed in a stock filing that the U.S. Securities and Exchange Commission (SEC) has opened an investigation into its accounting practices. Specifically, the investigation is focusing on Alibaba's relationships with its affiliated companies and how the company reported data from a one-day shopping event that gave Alibaba a world record for internet sales volume. 

This may be part of a pattern: In a special report, TheStreet discovered that the Obama Administration has been more aggressive at challenging merger activity in corporate America, with the FTC, DOJ, SEC and other regulators leading the way. 

Alibaba has been positioned as a symbol of China's increasing capitalist might. But as investors hit the panic button, Alibaba is beginning to look like an uncertain bet for investors.

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Alibaba burst onto the New York Stock Exchange two years ago with the world's largest-ever initial public offering -- $25 billion. The company was founded in China 17 years ago as a way to connect Chinese suppliers with international businesses. Since then, Alibaba has become an e-commerce juggernaut to rival Amazon and eBay, serving not only business-to-business transactions, but consumer-to-consumer and business-to-consumer as well.

The company also offers its own e-payments service, as well as platforms for cloud computing. The company owns stakes in a generous helping of affiliate businesses, including a joint venture with Yahoo (YHOO) , which owes much of its current market value to its stake in Alibaba.

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Alibaba currently carries a market cap of $186.71 billion. By volume, it has elbowed Walmart from its position as the globe's largest retailer.

But, as we've seen many times, big business draws the attention of big government. And now the SEC is on Alibaba's case, making this e-commerce titan a not-so-great place for your investment cash.

According to Alibaba's Wednesday filing, the SEC is apparently interested in Alibaba's logistics company, Cainiao. Alibaba created Cainiao in 2013 jointly with several other logistics companies to deliver most of the goods sold via Alibaba's e-commerce platforms. Alibaba's CEO, Jack Ma, serves as chairman of Cainiao, and Alibaba owns a 47% chunk of the firm. However, it does not count Cainiao's revenue results with its own. Gray relationships such as this have drawn scrutiny from analysts, and now, apparently, from the U.S. federal government as well.

In addition, the SEC appears to be concerned with how Alibaba handled the most recent Singles Day, a holiday for Chinese consumers that outpaces the U.S.'s Cyber Monday with its internet shopping frenzy. Last November, Alibaba broke the world record for most online sales in a single day, with approximately $14.3 billion.

It's uncertain how the SEC probe will affect Alibaba and its stock. However, investors are already heading for the exits. The stock fell from $81.12 to as low as $74.12 per share yesterday.

The SEC's investigation will continue to shed some light on some of the weaknesses in Alibaba's business. It's not a terrible investment choice per se, but shares of Alibaba could go much lower as the big government scrutiny continues. Wary investors should steer clear for the short run.


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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.