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Icap Europe fined £54.5m over Libor misconduct

Icap Europe has been fined a total of £54.5m for widespread misconduct relating to Libor.

The FCA has fined the inter-dealer broker £14m while it has also been hit with a £40.5m fine by the US Commodity Futures Trading Commission.

Between October 2006 and November 2010 Icap brokers colluded with traders at UBS to manipulate the Japanese Yen Libor rates for the benefit of traders.

Icap breached the FCA’s principles for businesses while the collusion involved a significant number of brokers and two managers over a number of years.

This involved brokers deliberately disseminating incorrect or misleading Libor submission levels by emailing skewed suggestions of rates to panel banks and requesting certain banks to make specific submissions.

UBS made 330 written requests to Icap brokers to manipulate Libor and a unquantified number of oral requests.

One broker received £5,000 a quarter in corrupt bonus payments from a manager as a reward for his helping to manipulate Japanese Libor rates.

The FCA and US regulators have already issued fines for Libor rigging to Barclays for £290m, the Royal Bank of Scotland for £390m and UBS for £940m.

FCA director of enforcement and financial crime Tracey McDermott says: “The misconduct in relation to Libor has cast a shadow over the financial services industry.

“The findings we publish today illustrate, once again, individuals within the industry acting with a cavalier disregard both for regulatory obligations and the interests of the markets. Icap’s significant failings in culture and controls allowed that misconduct to flourish and fell far short of our expectations.

“Restoring trust in the industry starts with rooting out and recognising bad practice. True change will however only be achieved when all in the financial services industry accept and deliver on their responsibility to ensure that markets operate with integrity.

“This is our fourth penalty in relation to Libor and our investigations continue. The lessons however go far wider than Libor and we will take a very dim view of those who do not learn them.”

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