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FSA investigates interdeal broker over Libor-rigging


The FSA is investigating ICAP, one of the world’s largest interdealer brokers, for possible breaches of conduct in relation to the Libor-rigging scandal.

An internal memo, seen by the Financial Times, says the regulator has assigned seven of the roughly 50-strong team investigating rate-rigging among British financial firms to ICAP.

ICAP is involved in trades that are related to Libor but is not involved in the Libor-setting process. In June, shortly after Barclays was fined £290m for its role in the scandal, ICAP founder Michael Spencer, the former Conservative Party chairman, played down the firm’s involvement in the scandal, saying the global investigations were not a concern as his company was not “front and forward” in investigations and not involved in setting rates.

However, the memo reportedly shows the FSA has been probing whether a subsidiary of the group broke rules by “directly or indirectly inappropriately influencing or attempting to influence submissions used to compile the London Interbank Offered Rate… [for] Japanese yen and possibly US dollars”.

Reports have previously linked ICAP brokers to the probe but the memo gives the first piece of evidence that the firm is part of investigations.

The FSA is investigating six firms as part of the probe, not including Barclays and UBS. UBS was fined a total of £940m by US, UK and Swiss regulators in December for its role in the scandal.

It has been reported that Royal Bank of Scotland is due to receive a fine of up to £350m for its role in the scandal.


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