ADR scandal rumbles on for Big 4 depositary banks

[kreslik.news]

Citing “people close to the investigation”, the WSJ reported that the US financial watchdog is examining whether the four big depositary banks have broken controls designed to prevent market abuse and tax fraud.

ADRs are a type of security that allows shares of a foreign firm to be traded in USD on US securities markets, and can be thought of as the estranged twin of ordinary shares.

To trade ADRs, a client of a non-US securities firm must first purchase shares of the desired company within the country that it is hosted. According to BNY Mellon’s 2015 market review, there were 160 ... (read more)