SFO Charges 3 Ex-ICAP Brokers over Japanese Yen LIBOR Case, as Investigation Unfolds

The UK's Serious Fraud Office (SFO) has announced charges against three former ICAP employees including Danny Martin Wilkinson, Darrell Paul

SFOThe UK’s Serious Fraud Office (SFO) has today announced its latest action against three persons allegedly involved in the Japanese yen LIBOR Case, bringing the total number of people facing charges to nine, as the investigation continues.

The three persons named today by the SFO, included former-ICAP employees Danny Martin Wilkinson, Darrell Paul Read and Colin John Goodman, according to the SFO’s press release. Forex Magnates contacted an ICAP company spokesperson who declined to comment further on the matter. Just yesterday ICAP appointed a CEO to its ISDX exchange business. The news from the SFO today also follows the FDIC’s announcement from earlier in May that it was suing 16 banks with relation to LIBOR investigations.

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Historical Matter Yet Investigation Ongoing

A spokesperson at the SFO explained to our reporters that the three individuals named in their announcement today must appear on April 15th at Westminster Magistrates’ Court, as noted in the press release, and could face prison time, in addition to or in lieu of monetary penalties, as the context is held in a criminal proceeding.

The SFO decided to accept the LIBOR case for investigation as early as July 6, 2012, a case that is nearing its two-year mark. Legislation proposed as part of MiFID II includes minimum mandatory prison sentences for violators of market abuse directive regulations, and if enacted will pass across the EU within a few years time, as covered by Forex Magnates earlier in Q1 2014.

According to sources and people close to the development, the three persons  left ICAP at some point in 2012, and were no longer employed with the broker since then, and while the news is fresh off the SFO’s website, the matter is related to the ‘historical period’ where the alleged conspired to defraud between August 8th, 2006 and September 7th, 2010. ICAP had already settled on related charges that included JPY LIBOR last September. Shares of ICAP traded down 3% today, although it’s not clear if that was related to the news.

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The SFO, an independent governmental office, has already brought LIBOR related charges against Tom Hayes in June 2013; against Terry Farr and James Gilmour in July 2013; and against Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas in February 2014.

A spokesperson at the SFO shared how on April 30 at Southwark Crown Court there is going to be a case review hearing for (i) the trial of Hayes, currently listed to begin in January 2015, and (ii) the trial of Farr and Gilmour, currently listed to begin in September 2015.

Rate Rigging Cases Bringing Focus to Price Discovery Process

Forex Magnates reports this news as relevant to our readers since the recent investigations that have unfolded about Foreign Exchange rate manipulation has led to major dealers being investigated by a number of regulators around the world, placing great attention on the method by which rates are determined and the integrity of the world’s largest market which remains decentralized.

Thus there is a parallel to the interest rate benchmarks which have faced similar cases of rate manipulation, when compared to Forex, as noted above, and as regulators and industry participants contemplate how to best mitigate such risks for the sake of market integrity.

As part of Forex Magnates’ upcoming Quarterly Industry Report (QIR) for the first quarter of 2014, extensive research surrounding news relevant to the ongoing Forex probe, and its effect on the future of regulation, will be available for purchase.

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