July 20, 2018 / 4:21 PM / 3 months ago

UPDATE 1-Deutsche to pay $75 mln to settle ADRs abuses case, U.S. SEC says

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By Katanga Johnson

WASHINGTON, July 20 (Reuters) - The U.S. Securities and Exchange Commission said on Friday that Deutsche Bank has agreed to pay nearly $75 million to settle an investigation into the mishandling of pre-release American Depositary Receipts (ADR).

Deutsche Bank did not admit or deny the SEC's findings but agreed to return its "ill-gotten gains" and comply with the SEC's fine, the regulator said.

The SEC said its investigation has revealed "industrywide abuses” in pre-released ADRs, said Stephanie Avakian, of the SEC's Enforcement Division.

“Failures at each institutional link in the chain of these transactions, from depositary bank to broker-dealer, left the markets for those ADRs ripe for potential abuse at the expense of ADR holders.”

Deutsche said in a statement: "The bank provided substantial cooperation to the SEC in its inquiry and voluntarily stopped engaging in pre-release ADR transactions entirely by late 2016." (Reporting by Katanga Johnson Editing by Chizu Nomiyama and Jeffrey Benkoe)

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