US SEC fines Citibank more than $38 mn for abuse in handling ADRs

Citibank will pay more than $38 million to the US. Securities and Exchange Commission (SEC) for abuse in handling American Depositary Receipts (ADRS), the regulator saidin a statement on Wednesday.

The SEC found that Citibank falsely provided US securities that represent foreign shares, or ADRs, to brokers in thousands of premature transactions. Those brokers and customers did not have the actual number of foreign shares to support those ADRs, the SEC statement said.

The bank did not admit or deny the SEC's findings on its practices but agreed to pay the fine and additional fees related to the abuses.

"We are pleased to have this matter resolved," a Citigroup spokeswoman said.