Banca IMI Securities Corp, a New York broker-dealer, pleads guilty to antitrust charge
Banca IMI Securities Corp, a New York broker-dealer, pleaded guilty to an antitrust charge and was sentenced to pay a criminal fine in excess of $2 million for its involvement in a bid-rigging conspiracy for certain financial instruments.
According to the plea agreement, Banca IMI admitted to conspiring with other institutions and individuals to submit rigged bids to borrow pre-release American Depository Receipts (ADRs) from March 2012 until at least August 2014.
Through the purchase and sale of ADRs, U.S. investors are able to gain exposure to companies whose common stock is listed only on foreign stock exchanges. The U.S. Securities and Exchange Commission permits four U.S. depository banks to create ADRs, which represent foreign ordinary shares and can be traded in the United States.
Banca IMI pleaded guilty to conspiring to borrow pre-release ADRs from U.S. depository banks at artificially suppressed rates. During the conspiracy, a U.S. depository bank began using an auction-style process for pre-release ADRs and invited Banca IMI and other broker-dealers to submit competitive bids for rates to borrow ADRs.
“Today’s charge represents the commitment of the Department of Justice and its law enforcement partners to uncovering and prosecuting cheaters who corrupt our financial and capital markets,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.
The Washington Criminal II Section of the Antitrust Division and the FBI’s International Corruption Unit are conducting the investigation into bid rigging in the market for pre-release ADRs. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal II Section at 202-598-4000.
Banca IMI Securities Corp will pay a criminal fine in excess of $2 million for its involvement in the bid-rigging conspiracy. The fine is a result of the guilty plea and is a significant step in the investigation into the antitrust violations.
The guilty plea and the sentence are a reminder that the government will aggressively pursue those who engage in anticompetitive and fraudulent conduct.
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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