Regulators Poised To Unveil ICAP Libor Deal
ICAP, the interdealer broker, is poised to agree a Libor rate-rigging settlement next week that would take the aggregate penalties from the scandal to more than £1.7bn.
Sky News understands that ICAP, which is run by Michael Spencer, a prominent Conservative donor and former party treasurer, has negotiated a modest reduction in the roughly £70m of penalties it had been expected to pay to regulators in the UK and US.
People close to the discussions between ICAP and the authorities said it was conceivable that a co-ordinated settlement could be announced as early as the first half of next week, although it could yet be delayed.
One insider said on Friday that ICAP had chipped away at the likely settlement, with the London-based Financial Conduct Authority (FCA) now expected to impose a penalty of just under £20m.
The total fines are expected to be in the region of £60m-£70m, they said.
It is unclear whether this deal will include the Commodity Futures Trading Commission, the US regulator which has fined three other banks for their part in the Libor-rigging affair, raising the possibility that ICAP's eventual bill could still rise.
The civil settlement will be an embarrassment to Mr Spencer, who has consistently sought to downplay the extent of ICAP's involvement in the manipulation of Libor, although it will not direct any criticism at him personally, according to insiders.
The anticipated deal would not be financially material to ICAP and would be broadly in line with the projections of City analysts.
It would also be a relatively modest sum when viewed in the context of the fines imposed on the 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 for the misdemeanours of their employees.
The ICAP settlements will be discounted because of the interdealer broker's co-operation with regulators, according to one person close to the situation.
It is unclear whether Mr Spencer or other senior executives will have part of their pay packages docked or clawed back once the Libor fines are made public, although shareholders are likely to push for that to happen.
ICAP said this year that it had suspended one employee and placed three others on administrative leave, although their current employment status is unclear.
Its settlement will underline the role played by interdealer brokers, which act as intermediaries in deals between bank traders, in the global financial system.
ICAP and the FCA declined to comment.