US and British regulators fined world's biggest interdealer broker ICAP USD87 million over the Libor interest rate rigging scandal. Libor, or the London interbank offered rate, is a benchmark used to price against financial instruments like personal mortgages and complex derivatives that run up to trillions of dollars. The authorities also charged three ex-ICAP employees who were also involved in the scandal.
The US Commodity Futures Trading Commission had ordered ICAP Europe Ltd, to pay USD65 million due to wire fraud. The Financial Conduct Authority of Britain had also commissioned ICAP's European arm to pay GBP14 million or USD22 million for the same issue. Former ICAP derivatives broker Darrell Read, cash broker Colin Goodman and Read's supervisor Daniel Wilkinson two counts of wire fraud and conspiracy to commit wire fraud by the US Department of Justice. Both offenses would carry sentences up to 30 years.
ICAp is known as a voice and electronic dealer broker which provides services in post trade risk.
Justice Department's criminal division Acting Assistant Attorney General Mythili Raman said, "These three men are accused of repeatedly and deliberately spreading false information to banks and investors around the world in order to fraudulently move the market and help their client fleece his counterparties."
Scores of other banks and individuals would be potentially charged for manipulating the Libor rate. In an interview with Reuters, Raman said, "We have a lot more to look at here."
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