Foreign Company ADR OTC Transactions Are Subject To US Securities Laws
Holders of Daimlers' US ADR’s filed a claim against the company following a decline in value due to alleged disclosure failures regarding their diesel engine emissions. Despite having their ADR delisted and trading over-the-counter, they were ultimately subject to US securities laws (under 10b) due to being registered with the SEC and marketed in compliance with SEC laws. In response to the growing trend of foreign companies being subject to US securities claims, foreign companies should pay careful attention to their global D&O program.
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