ICAP sucked into Libor investigation

Interdealer broker ICAP is under investigation over its possible role in Libor manipulation, an internal FSA memo obtained by the Financial Times has confirmed.

Staff at ICAP had previously been implicated in the scandal, but the document is the first confirmation that the business is a target of the investigation in its own right.

According to the note, seven of the 50 FSA investigators currently assigned to the scandal are looking specifically at the business, the world’s largest institutional brokerage.

Dating to March 2012, the memo shows that regulators were concerned that an ICAP subsidiary had been ‘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.’

The banking sector, which provides the primary quoted inputs to set the Libor rate, has previously been the main subject of investigation for regulators on both sides of the Atlantic.

ICAP is thought to be the first non-bank to come under the spotlight. Documents filed in connection to the $1.5 billion fine paid by UBS to settle Libor charges showed that traders at the bank has used third party brokers to pass on their requests for specific quotes to other banks.