ING to Pay $5 Million to Settle Misconduct Charges on NYSE

This is the second announcement of a fine against the bank this week.

New York Stock Exchange Regulation (NYSE Regulation), the regulatory body that monitors activity on the NYSE’s markets, announced on Thursday that ING Financial Markets will pay $5 million to settle misconduct charges related to American Depository Receipts (ADRs).

ADRs are negotiable securities that allow US investors to invest in foreign companies without needing to purchase their shares in a foreign market. On the flip side, it also allows foreign companies to increase their exposure to US markets. 

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The charges against the Dutch multinational bank follow an investigation by NYSE Regulation, which looked into improper conduct by a trader, Ann Louise Healy, on ING’s securities lending desk from 2007 to 2015.

The regulator found that during this time, Healy borrowed ADRs from counterparty broker-dealers when she knew that these firms did not own the requisite ordinary foreign shares underlying those ADRs.

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Furthermore, Healy and ING made no effort to check whether they or the customers who they lent the pre-released ADRs owned the shares. As a result, the bank was selling ADRs that were not backed by ordinary shares. As can be expected, this is against the rules of the NYSE.

As a result of her actions, NYSE Regulation suspended Healy from having any association with an NYSE member or member organisation from May 18, 2018, until December 31, 2018.

Second fine for ING in a week

The announcement from NYSE Regulation comes off the back of news earlier this week that the Dutch bank has agreed to pay fines and other payments of €775 million ($902 million) in relation to money laundering.

This is because a lingerie trader, a building-materials supplier and two fruit and vegetable importers have all been accused of laundering hundreds of millions of euros through their accounts with ING.

An investigation into ING found that between 2010 and 2016 the bank missed the signs of this activity because of “serious and repeated shortcomings” in its approach to anti-money-laundering rules.

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