The Securities and Exchange Commission fined Industrial and Commercial Bank of China Financial Services LLC, a wholly-owned subsidiary of Industrial and Commercial Bank of China Limited /zigman2/quotes/204265987/delayed IDCBF -6.88% , $42 million on Friday for alleged improper handling of "pre-released" American Depositary Receipts, or ADRs. ADRs are U.S. securities that represent foreign shares of a foreign company and require a corresponding number of foreign shares to be held in custody at a depositary bank. The practice of "pre-release" allows ADRs to be issued without the deposit of foreign shares, provided brokers receiving them have an agreement with a depositary bank and the broker or its customer owns the number of foreign shares that corresponds to the number of shares the ADRs represent. The SEC's order alleged that Industrial and Commercial Bank of China improperly obtained pre-released ADRs from depositary banks when ICBCFS should have known that neither the firm nor its customers owned the foreign shares needed to support those ADRs. This inflated the total number of a foreign issuer's tradeable securities and resulted in abusive practices such as inappropriate short selling and dividend arbitrage. ICBCFS did not admit or deny the SEC's findings but agreed to be censured in addition to returning nearly $24 million in ill-gotten gains, and paying $4.4 million in prejudgment interest and a $14.3 million penalty. The U.S. Department of Justice also announced on Friday that ICBCFS pleaded guilty to bid-rigging of pre-released ADRs by the same securities lending desk.