ICAP Faces €6.45 Million Fine for LIBOR Rigging

The EU regulator updated the penalty amount years after courts scrapped the initial fine.

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 cartelsReuters 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.

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“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 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.

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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 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.

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