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Icap Europe hit with £54.5m fine for 'significant' Libor failings
by Sarah Miloudi on Sep 25, 2013 at 13:40
Icap Europe has been forced to fork out £54.5 million in fines for misconduct linked to the London Interbank Offered Rate (Libor).
In what was the first penalty dished out to a broking firm for Libor failings, the FCA fined the firm £14 million, which was accompanied by a $65 million fine from the US Commodity Futures Trading Commission (CFTC).
According to the FCA, a 'significant' number of Icap's brokers - including two of its managers - manipulated Libor.
The FCA said that between October 2006 and November 2010 brokers colluded with traders at UBS to manipulate Japanese yen Libor rates by emailing skewed estimates to panel banks and by asking panel banks to submit specific projections of where the rate should sit on particular days.
Moreover, during the FCA's investigation, it found that a broker had received 'corrupt' bonus payouts as a reward for helping manipulate the benchmark.
'The findings illustrate, once again, individuals within the industry acting with a cavalier disregard both for regulatory obligations and the interests of the markets,' said Tracey McDermott, the FCA's director of enforcement and financial crime.
McDermott also criticised the broker's management culture and said it had allowed the misconduct to 'flourish'.
In conjunction with the FCA's fine, the US Commodity Futures Trading Commission (CFTC) handed out its own penalty to Icap, fining it $65 million.
UBS AG has already been penalised for flaunting Libor rules, and last December it was handed a £160 million fine by the UK's former City watchdog, the Financial Services Authority (FSA).
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