MERRILL LYNCH FINED OVER USD8 MILLION FOR IMPROPER ADR HANDLING
April 3rd, 2019The Securities and Exchange Commission announced on March 22 that Merrill Lynch, Pierce, Fenner & Smith Incorporated will pay over USD8 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs). The SEC’s says Merrill Lynch improperly borrowed pre-released ADRs from other brokers did not own the foreign shares needed to support them. This inflated the total number of a foreign issuer’s tradeable securities, which resulted in abusive practices like inappropriate short selling and dividend arbitrage.