JPMorgan says it is a subject of SEC probe of ADR abuses

NEW YORK (Reuters) - JPMorgan Chase & Co said on Wednesday it is among banks and securities dealers being investigated by the U.S. Securities and Exchange Commission for their handling of so-called "pre-released" American Depositary Receipts (ADR) between 2011 and 2015.

The disclosure, made in a regular quarterly filing by JPMorgan, comes after the SEC said on July 20 that Deutsche Bank had agreed to pay nearly $75 million (57.13 million pounds)to settle its part of a continuing investigation into mishandling of the securities.

ADRs are U.S. securities that represent foreign shares of a foreign company. They require a corresponding number of foreign shares to be held in custody at a depositary bank. Under certain conditions the SEC allows the "pre-release" of ADRs before the corresponding shares have been deposited.

In the case of Deutsche, the SEC said the bank had improperly provided thousands of pre-released ADRs and failed to prevent securities law violations when the instruments were borrowed or lent.

Failures to properly handle the transactions leave ADRs "ripe for potential abuse at the expense of ADR holders," the SEC said when it settled with Deutsche.

JPMorgan said it has been cooperating with the investigation. A spokesman declined to comment further.

(Reporting by David Henry in New York; Editing by Chris Reese)

By David Henry