Breaking News: ICAP’s Yen Libor manipulation leads to $87 million in CFTC and FCA fines

ICAP’s fine is one of the largest civil monetary penalties ever doled out by either financial regulator.

Breaking news,,, The CFTC has announced it has ordered ICAP Europe to pay a $65 million fine related to the manipulation of the Yen Libor rate over a four year period. ICAP was similarly assessed a £14 million (approximately $22.4 million) penalty by UK regulator FCA, bringing the total ICAP fine to more than $87 million. ICAP was further ordered to strengthen its internal controls.

What happened exactly? According to the CFTC, for more than four years running from October 2006 through January 2011, ICAP brokers on its Yen derivatives and cash desks knowingly disseminated false and misleading information concerning Yen borrowing rates to market participants in attempts to manipulate, at times successfully, the official fixing of the daily Yen Libor.

ICAP brokers, including one known as “Lord LIBOR” or “Mr. LIBOR,” did so to help out a highly valued client, a senior Yen derivatives trader at UBS and later at another bank, in his relentless attempts to manipulate Yen Libor to benefit his derivatives trading positions tied to this benchmark. On limited occasions, ICAP Yen brokers engaged in this unlawful conduct to benefit other derivatives traders as well.

Serious stuff. However the news barely moved ICAP shares, which at the time of writing are off just 0.8% on the day. ICAP (LON:IAP) has a market capitalization of about £2.5 billion ($4 billion).

For the complete CFTC press release click here.

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