Ex-ICAP brokers charged over Libor as firm fined $88 million

Three former ICAP Plc employees were charged by U.S. prosecutors and the interdealer broker was fined $88 million as the five-year-old probe into the rigging of benchmark interest rates ensnared another financial institution.

The brokers were charged with two counts of wire fraud and conspiracy to commit wire fraud, the U.S. Justice Department said in a statement today. ICAP, the world’s largest broker of transactions between banks, was fined $65 million by the U.S. Commodity Futures Trading Commission and 14 million pounds ($22.5 million) by the U.K. Financial Conduct Authority, the regulators said in separate statements.

“These three men are accused of repeatedly and deliberately spreading false information to banks and investors around the world in order to fraudulently move the market and help their client fleece his counterparties,” Mythili Raman, the acting assistant attorney general of the DOJ’s criminal division, said in the statement.

Seven people have been charged and four financial institutions have been fined about $2.6 billion in the global probe. Barclays Plc Chief Executive Officer Robert Diamond was forced to resign last year after the lender became the first institution penalized in the scandal London interbank offered rate.

Inexcusable Actions

“We deeply regret and strongly condemn the inexcusable actions of the brokers who sought to assist certain bank traders in their efforts to manipulate yen Libor,” Michael Spencer, chief executive officer of ICAP, said in a statement. “None of the three individuals at the center of the activity remains with the firm.”

The penalty is the first against an interdealer broker in the investigation. ICAP is also under investigation by the CFTC over allegations that ISDAfix, the benchmark for the $379 trillion swaps market, was manipulated by brokers.

The U.S. had already charged former UBS AG traders Tom Hayes and Roger Darin in December. Hayes was also charged in the U.K. by the Serious Fraud Office, along with two former brokers at RP Martin Holdings Ltd. Hayes faces eight charges of conspiracy to defraud for assisting employees at 10 banks and brokerages, including ICAP, to manipulate yen Libor rates over a four-year period.

Interdealer brokers act as a go-between for banks that trade bonds, stocks, currencies, energy and derivatives.

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