Thursday, January 26, 2017

ADRs Find Themselves in an Unwelcome Spotlight

Author: David Schwartz J.D. CPA

American Depositary Receipts are back in the news.  The Wall Street Journal reported on November 8, 2016 that the Securities and Exchange Commission has issued subpoenas to four large banks with expansive ADR businesses seeking information about trading of ADRs. Citing unnamed sources “close to the investigation,” the Wall Street Journal article said that the focus of the SEC probe seems to be the “pre-release” of ADRs, where a bank may issue depositary receipts without actually having custody of the underlying shares. 

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Tags: litigation, Forex, ADRs

Sunday, May 31, 2015

BIS Forms Consultation Committee to Address FX Practices

Author: David Schwartz J.D. CPA
Amidst the series of legal settlements in recent months by global banks for forex market manipulation, the  Bank for International Settlements (BIS) has announced that it will set up a working group under its Markets Committee to study improvements in the foreign exchange markets.  
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Wednesday, February 4, 2015

JP Morgan is First to Settle Forex Anti-trust Suit

Author: David Schwartz J.D. CPA
JPMorgan Chase & Co has agreed to pay $100 million to settle a U.S. antitrust lawsuit in which investors accused it and 11 other major banks of rigging prices in the $5 trillion-per-day foreign exchange market. Investors sued the 12 banks alleging that traders at each conspired to rig foreign currency exchange transactions to boost profit at the expense of bank customers and investors.  The settlement must still be approved by the court, and this settlement is separate from the roughly $1.01 billion JP Morgan has agreed to pay to resolve probes by U.S. and European regulators. 
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Tags: Forex

Thursday, December 4, 2014

FCA Fines Five Banks $1.7 Billion for FX Failings

Announces Industry-wide Remediation Programme

Author: David Schwartz J.D. CPA
On November 12 2014, the UK’s Financial Conduct Authority issued Final Notices collectively imposing record fines totaling $1.7 billion on five global banking firms for alleged rigging of the FX market. The FCA found that the banks engaged in widespread conduct that put the banks’ interests ahead of those of their clients and other market participants.
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Thursday, October 16, 2014

ESMA Proposes Mandatory Clearing for FX Non-Deliverable Forwards

Author: David Schwartz J.D. CPA

The European Securities and Markets Authority is seeking input on its plans for mandatory central counterparty clearing of foreign exchange non-deliverable forwards (FXNDF). FXNDFs are cash-settled foreign exchange forward contracts that cannot result in physical delivery of the designated currencies at maturity. FXNDFs allow hedging of currencies where government regulations restrict foreign access to local currency or the parties wish to compensate for risk without a physical exchange of funds.

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