Two U.S.-based subsidiaries of an investment bank agreed to pay approximately $75 million to settle charges of failing to properly handle "pre-released" American Depositary Receipts ("ADRs").
The SEC alleged that a commercial bank subsidiary and a broker-dealer/investment adviser subsidiary of an investment bank allowed pre-released ADRs to be utilized for misuse, including "inappropriate short selling and inappropriate profiting around dividend payouts."
The commercial bank agreed to pay more than $44.4 million in ill-gotten profits, $6.6 million in prejudgment interest and a $22.2 million penalty. The broker-dealer/investment adviser agreed to pay about $1.6 million.
The two subsidiaries neither admitted nor denied the SEC allegations.
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