A broker-dealer agreed to pay more than $135 million to settle SEC charges for improperly handling "pre-released" American Depositary Receipts ("ADRs").
According to the SEC Order, JPMorgan Chase Bank, N.A. ("JPMorgan") issued ADRs that in several instances "were not backed by ordinary shares as required by the ADR facility." The SEC alleged that JPMorgan, at various times, "pre-released ADRs to Pre-Release Brokers" without ensuring that those "on whose behalf the pre-released ADRs were being obtained" represented themselves accurately and that they did, in fact, beneficially own the corresponding number of ordinary shares.
The SEC recognized JPMorgan's significant voluntary cooperation and remediation. JPMorgan neither admitted to nor denied the SEC's allegations.
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