On December 17, the SEC announced a settlement with a global investment bank to resolve allegations that the bank mishandled the pre-release of American Depositary Receipts (ADRs)—U.S. securities that represent shares in foreign companies. The SEC noted in its press release that ADRs can be pre-released without the deposit of foreign shares only if: (i) the brokers receiving the ADRs have an agreement with a depository bank; and (ii) the broker or the broker's customer owns the number of foreign shares that corresponds to the number of shares the ADR represents. The SEC alleged that the bank improperly provided thousands of pre-released ADRs where neither the broker nor its customers beneficially owned the required shares. According to the SEC’s order, the bank’s alleged practice of allowing pre-released ADRs that were in many instances not backed by ordinary shares violated the Securities Act of 1933. The bank has neither admitted nor denied the SEC’s allegations, but has agreed to pay more than $29.3 million in disgorgement, roughly $4.2 million in prejudgment interest, and a $20.5 million penalty. The SEC’s order further acknowledges the bank’s cooperation in the investigation and implementation of remedial measures.