Libor Scandal: ICAP Fined Amid Criminal Probe
The London-based brokerage ICAP has been fined £55m and told three individuals will face criminal charges in connection with the Libor rate-rigging scandal.
The financial penalties, previously reported as imminent by Sky News, were confirmed by the company - headed by former Conservative Party Treasurer Michael Spencer - moments before news of the charges emerged.
The City watchdog, the Financial Conduct Authority (FCA), imposed £14m of the total fine while US regulator the Commodity Futures Trading Commission (CFTC) secured £41m.
The CFTC found that ICAP brokers, including one known as "Lord Libor", helped fixed the rate for a period of at least four years.
It also highlighted various email conversations including one in which a Ferrari was offered as an apparent bribe.
In its later statement announcing criminal charges, the US Justice Department outlined its case against three brokers it alleged were part of the manipulation of Libor.
The men were named by authorities as former ICAP employees Daniel Wilkinson and Colin Goodman from England and Darrell Read - a New Zealand national.
Each is accused of conspiracy to commit wire fraud and two counts of wire fraud and face a maximum 90 years in jail if convicted.
US Attorney General Eric Holder said: "By allegedly participating in a scheme to manipulate benchmark interest rates for financial gain, these defendants undermined the integrity of the global markets.
"They were supposed to be honest brokers, but instead, they put their own financial interests ahead of that larger responsibility and as a result, transactions and financial products around the world were compromised, because they were tied to a rate that was distorted due to the brokers' dishonesty."
A separate investigation by the UK's Serious Fraud Office into the setting of the Libor rate is continuing.
In its statement on Wednesday, after confirming the civil fine, the FCA said ICAP's misconduct involved a "significant number of brokers (including two managers) and occurred over a number of years between October 2006 and November 2010."
The misconduct included, the FCA said, brokers colluding with traders at UBS to manipulate the (Japanese Yen) JPY Libor rates for the benefit of the traders.
The statement said it involved brokers deliberately disseminating incorrect or misleading Libor submission levels and "one broker receiving corrupt bonus payments (at the instigation of one manager) as a reward for his assistance in manipulating the JPY Libor rates."
Confirmation of the civil settlements against the interdealer brokerage - which essentially acts as an intermediary in deals between bank traders in the global financial system - takes the aggregate penalties from the scandal to date to more than £1.7bn.
The £55m penalty is a relatively modest sum when viewed in the context of the fines imposed on three other financial institutions which have settled with regulators over Libor.
Barclays paid just over £290m, Royal Bank of Scotland just over £390m and UBS just over £1bn.