ICAP Faces €6.45 Million Fine for LIBOR Rigging

The European Commission has imposed a fine of 6.45 million euros (around $7.9 million) on ICAP, the largest inter-dealer broker, for its involvement with several yen interest rate derivatives cartels, Reuters reported on Friday.

The latest fine is an updated version of a significantly higher sum the European antitrust regulator sought from the company earlier but failed to do so.

“Today’s decision, correcting the procedural error and including a detailed reasoning on the fine calculation, imposes fines on the three entities of ICAP having participated in the five infringements at the time,” the commission said in a statement.

Background

The EC initially slapped ICAP with a penalty of 14.9 million euros in 2015. The allegations include ICAP’s involvement in rigging the yen Libor Libor Libor stands for London Inter-bank offered rate. It is an industry-specific term which most of us would never have heard of until the "Libor scandal" became popularized in 2012. Libor is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. The Libor rate effects over $800,000,000,000,000 in financial deals. Banks simply cannot lend money to one another whenever they like as there is a system in place. Every day a group of leading Libor stands for London Inter-bank offered rate. It is an industry-specific term which most of us would never have heard of until the "Libor scandal" became popularized in 2012. Libor is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. The Libor rate effects over $800,000,000,000,000 in financial deals. Banks simply cannot lend money to one another whenever they like as there is a system in place. Every day a group of leading Read this Term financial benchmark in several cartels. Banking giants like Royal Bank of Scotland, UBS, Deutsche Bank and Citigroup were also involved with ICAP in several periods.

However, the decision was scrapped by Europe’s second-highest court two years later as the inter-dealer broker appealed. The antitrust regulator faced a second defeat at the Luxembourg-based EU Court of Justice after an appeal.

Now, it is to be seen how the inter-dealer brokerage giant reacts to the fresh fines, whether it will move to the court again or just oblige with the regulatory decision.

The LIBOR benchmark attracted criticism with the increasing manipulation of its rates over the years. Many traders were charged and penalized for their role in this mass Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market rigging.

The United Kingdom’s financial market authority earlier this year decided to cease most of the LIBOR currency benchmark by the end of this year, while some of the US dollar settings will cease to exist by the end of June 2023, ending the controversial benchmark.

In March, TP ICAP completed the acquisition of private trading operator, Liquidnet and its subsidiaries, which further increased its dominance in the industry.