JPMorgan Chase & Co will pay over $135 million (€119 million) to settle charges it mishandled so-called “pre-released” American Depositary Receipts (ADRs), the Securities and Exchange Commission (SEC) announced on Wednesday.
The regulator said the investment bank improperly provided ADRs, which are US securities that represent foreign shares of foreign companies, to brokers even though the brokers and their clients lacked the corresponding foreign shares.
The bank did not admit or deny the SEC’s findings, but agreed to pay back ill-gotten gains and additional penalties, said the commission.
JP Morgan declined to comment. In August, the bank said it was under investigation for its handling of ADRs.
The bank is the eighth institution to face SEC charges on such a practice, according to the regulator. Its investigation into American Depositary Receipts abuse is ongoing, it said.
The commission added that improperly providing ADRs that are not supported by underlying foreign securities can create inappropriate short selling and dividend arbitrage. – Reuters
