London-based broker-dealer ICAP is negotiating a fine with UK and US regulators over a deal to end an investigation for allegedly helping traders manipulate the London interbank offered rate, or Libor.
ICAP is hammering out a settlement agreement with the US Justice Department, the Commodity Futures Trading Commission and the UK’s Financial Conduct Authority.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The amount of the fine to be paid is the unresolved part of the ICAP deal.
The UK and US regulators have fined three banks, UBS, Barclays and Royal Bank of Scotland, a total of US$2.6 billion over the rigging of the Libor.
British prosecutors have alleged in court that former UBS and Citi trader Tom Hayes have conspired with employees from at least 10 financial institutions, including ICAP, to rig rates.
Regulators alleged that some brokers exploited this middleman role to help rate-rigging mushroom from a small group of bank traders into a world-wide effort that distorted interest rates and in return, traders gave the brokers business to boost their commissions and other rewards.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataRegulators said that David Casterton, ICAP’s head of global broking, was included in emails between ICAP and UBS as they negotiated a deal that rewarded brokers for helping in the alleged manipulation.
Casterton has signed off on a quarterly fixing service payment of about US$27,000 that was shared among several ICAP employees.
ICAP officials have told UK regulators the payments were misconstrued.
ICAP added that they are cooperating with the probe and none of its senior management was ever aware of the attempted manipulation of benchmark interest rates. The firm also said that one employee has been suspended and three others have been put on administrative leave.
