Broker-Dealers Settle Charges for Misuse of Pre-Released ADRs

Two broker-dealers settled separate SEC charges (see here and here) for improperly obtaining the pre-release of American Depositary Receipts ("ADRs") that the firms should have been aware were not backed by foreign shares or obtaining the shares from other dealers.

To settle the charges with the SEC, Cantor Fitzgerald & Co. agreed to pay (i) $359,000 in disgorgement of ill-gotten gains, (ii) $88,000 in prejudgment interest, and (iii) a $200,000 penalty.

To settle the charges with the SEC, BMO Capital Markets Corporation agreed to pay (i) $2.2 million in disgorgement of ill-gotten gains, (ii) $546,000 in prejudgment interest, and (iii) a $1.2 million penalty.

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