Action against Respondent, a registered broker-dealer, in connection with an industry-wide sweep into practices related to the pre-release of American Depositary Receipts (ADRs).  According to the SEC, Respondent obtained pre-released ADRs from depositary banks pursuant to an agreement which required the broker receiving the pre-released ADRs to represent, among other things, that it beneficially owned the ordinary shares (or an equivalent security) represented by the ADRs.  The SEC alleges that Respondent’s brokers and customers did not always own the underlying ordinary shares and that Respondent otherwise used the pre-released ADRs in a way that violated the pre-release agreement.  Respondent has agreed to pay disgorgement of $4,869,072, prejudgment interest of $805,641, and a civil penalty of $2,434,536.

SEC Order

SEC Press Release