EU Fines ICAP $17M for Helping Traders Manipulate Yen Libor

The European Commission says that ICAP Plc has been ordered to pay a $17.2 million fine for helping traders manipulate benchmark interest rates linked to the Japanese yen. The word’s largest broker of transactions between banks is accused of spreading misleading data to lenders that set the yen Libor’s interbank lending rate, as well as helping traders communicate so they could collude with one another.

According to the Commission, the information was disguised as “predictions or expectations” but was actually geared toward influencing panel banks that were not involved in the infringements to turn in rates aligned with intended manipulations. The EU said ICAP facilitated six yen Libor cartels between ’07-’10 and attempted to get lenders to send rates that were similar to the panel. The broker also allegedly used other contacts to facilitate communication between an RBS trader and one from Citigroup (C). ICAP said it would appeal the fine and claims that the EU has shown no evidence that the broker engaged in violations of laws related to competition.

Authorities are looking into how bankers and derivatives traders worked together to make sure benchmarks were to their benefit, which could have affected over $300 trillion of financial products, loans, and contracts tied to the rate. While RP Martin Holdings Ltd., JPMorgan Chase & Co. (JPM), Deutsche Bank (DB), UBS AG (UBS), Royal Bank of Scotland Group Plc (RBS), and Citigroup already paid penalties to settle the EU’s case against them, ICAP refused. It has, however, paid $88 million of fines to United Kingdom and United States regulators to settle charges related to its contacts with traders at UBS.

ICAP Fined $17 Million by EU for Aiding Yen Libor Cartels, Bloomberg, February 4, 2015

ICAP fined 14.9 mln euros by EU regulators over yen cartels, Reuters, February 4, 2015

More Blog Posts:
Libor Manipulation Cases Get the Green Light from U.S. Courts, Institutional Investor Securities Blog, January 30, 2015

DOJ Charges Another Two Ex-Rabobank Traders Over Libor Manipulation, Institutional Investor Securities Blog, October 16, 2014

PFS Investments, Ex-Broker Under Investigation for Securities Fraud that Bilked At Least Twenty Customers, Stockbroker Fraud Blog, January 30, 2015