On July 20, 2018, the Securities And Exchange Commission announced that two United States based subsidiaries of Deutsche Bank AG would pay nearly $75 million to settle charges of mishandling “pre-released” American Depositary Receipts (ADRs). The case originates from an ongoing SEC investigation into abuses involving ADRs. In proceedings against Deutsche Bank Trust Co. Americas and Deutsche Bank Securities Inc, the SEC discovered that their misconduct allowed pre-released ADRs to be used for abusive practices.
The SEC found that Deutsche Bank Trust Co. Americas provided thousands of pre-released ADRs over more than a five-year period when neither the broker nor its customers had the requisite shares. The order against Deutsche Bank Securities Inc. found that its policies, procedures and supervision failed to prevent and detect securities law violations related to borrowing and lending pre-released ADRs.
Without admitting or denying the findings, DBTCA has agreed to return more than $44.4 million of alleged ill-gotten gains. DBSI, without admitting or denying the findings, has agreed to return nearly $1.6 million. Further details have been made available here.
