the Image of the German Bank is already the worse for wear hard – now new charges against the biggest money house of the Federal Republic to be known. The U.S. securities and exchange Commission SEC to according to the “Wall Street Journal” the suspicion that the Institute in the trade with so-called seem to Deposit (ADR) rules violated.
cor serve the purpose of making shares in the foreign tradable, without having this there allow. The principle is simple: A Bank buys stock in a company in their home country, and stores it in a vault. In a different country will now be issued according to the respective national legal Depository receipts. Anyone who buys this, acquires, so to speak, the right to the Deposit slip at any time against the real stock exchange. You could call the papers, therefore, as shadow shares.
The trade in ADR is, in principle, a common practice in the US, it already exists since 1927. According to the financial services provider Bank of New York Mellon ADR have been traded in the past year in the volume of 3.1 trillion dollars.
The SEC has now, apparently, the suspicion that four banks, including Deutsche Bank, with the Deposit seem to be playing fast and loose operated. Among other things, the banks could have issued Depository receipts, before they had to acquire the relevant shares, writes the Wall Street Journal, citing insiders. In principle, this is legal, because so may have different purchase periods to be bridged in the countries concerned. However, the SEC is suspicious of the banks, to have their freedom abused – for example, for so-called naked short selling.
With this illegal technology bets for investors on the forfeiture of a share: share certificates of a company, you don’t have yet and take advantage of the period until you need to submit these shares to the buyer, to sell, to Gamble. The bill goes on, if the stock price drops and the Investor can obtain within the purchase period cheap on the market. The difference between the sale price and the purchase price he takes as a profit.
banks deny all of the allegations
in addition to the German Bank, the Bank of New York Mellon, Citigroup and JPMorgan under suspicion are still in the trade with the ADR rules being violated.
The four banks had already been at the end of last year, the SEC asked to provide information, reports the “Wall Street Journal”. Currently, the sec values of the data and interview witnesses. It was not yet clear whether these preliminary investigations will culminate in a procedure.
The banks themselves deny all the allegations. Your representation that there are sufficient checks to prevent abuse of the trading with ADR.
The German Bank supervisors, because of their strong presence in the United States and in the capital market again and again problems with the U.S. Department of justice or the US. She is currently being negotiated among the U.S. Department of justice, iministerium a comparison in a dispute with dirty transactions with mortgage papers. It is a question of several billions of dollars. First of all, the US had demanded government and even the record-breaking sum of $ 14 billion.
Deutsche Bank is therefore under strong pressure. Since it has not in this amount for legal disputes, make speculation on the issue of new shares in the round. The price of the Deutsche Bank share had fallen, therefore in the short term under 10 Euro. Recently was able to recover the paper significantly, and at just under 13 euros.