JPMorgan settles securities case with $135mn payout

Bloomberg

JPMorgan Chase & Co will pay $135 million to settle Securities and Exchange Commission allegations that it mishandled US securities that represent sha-res of foreign companies, the latest bank fined in an industry crackdown on the practice.
The bank improperly provided what’s known as American depository receipts (ADR) to brokers when neither the brokers nor their clients held shares in foreign companies that were required to support such transactions, the SEC said in a statement.
Without admitting or denying the claims, JPMorgan agreed to pay a $49.7 million fine and $85.4 million in disgorgement and interest.
Wall Street’s main regulator has made ADR sales a focus of its enforcement efforts. The SEC said that the JPMorgan settlement was the eighth enforcement action against a firm that stemmed from the regulator’s ongoing probe into “abusive ADR pre-release practices.”
The SEC said the transactions inflated the amount of securities tied to foreign companies that were available in the market, potentially enabling inapprop- riate short selling and other abusive practices.